to our financial stability mandate, banks are significantly exposed to high - carbon and other vulnerable companies through loans and bond purchases, which makes them exposed to transition risk. as supervisors, it falls upon us to encourage and direct banks to identify and measure climate related risks and, above all, to manage them efficiently. to facilitate this process we issued supervisory expectations already in 2020 that banks should meet by the end of this year. and in 2022, we conducted the first supervisory climate stress tests for the banking sector at the euro area level. they showed that banks have made visible progress in meeting the expectations, but also revealed a number of gaps. environmental considerations are increasingly becoming part of our annual supervisory review and evaluation process, which can ultimately affect the capital requirements we set. regarding the role of macroprudential policy, especially the possibility to set higher capital buffer requirements for exposures to carbon - intensive companies, remains a subject of ongoing debate. more details on our activities are available in the newly published medium - term climate plan of banka slovenije. ladies and gentlemen, investments made today will shape our future. with the set of activities i have presented, central banks help motivate banks to steer their financing towards greener projects. in recent years, banks in slovenia and in the euro area have increased the extent of green financial products. at the moment, these are still mainly intended for households, and their volume represents a limited share of all bank loans. within the overall green finance market, they play much smaller role than esg funds and climate and sustainability bonds. but we all aware that policy measures, which have already been adopted, need time to be fully implemented and deliver results. and new ones will eventually be added. that is why i remain optimistic that the measures we have introduced recently will help to shape the framework, which will enable us to respond to new challenges thank you for the opportunity to join you today and be part of that process. 2 / 3 bis - central bankers'speeches 3 / 3 bis - central bankers'speeches

njuguna ndung ’ u : ifrs, basel ii and the challenges ahead in kenya keynote address by prof njuguna ndung ’ u, governor of the central bank of kenya, during the official opening of financial reporting workshop for the banking sector, nairobi, 27 march 2008. * * * distinguished participants, distinguished resource persons, ladies and gentlemen let me first thank ernst and young for the invitation to give today ’ s keynote address, on the financial reporting workshop for the banking sector. looking at the agenda, this meeting in the next two days will dwell on a number of important accounting and regulatory issues. therefore, to help set the stage for the discussion to follow, i would like to take this opportunity to expound on the central bank of kenya ’ s perspective on compliance with international financial reporting standards ( ifrs ), and specifically at the benefits from such compliance, the progress we have made, the link between ifrs and basel ii and the challenges ahead. acceptance and use of ifrs has become virtually universal, with many countries that hitherto operated their own national standards having phased them out for ifrs despite the associated challenges. international flows of investment capital and capital instruments across geographical boundaries have added a new impetus to the adoption of international standards globally. it is no wonder that in 1998, the institute of certified public accountants of kenya ( icpak ), moved from kenya accounting standards in favour of international accounting standards. the central bank as the principal regulator of banks and non - bank financial institutions, formulates prudential guidelines that are in harmony with ifrs in order to minimize conflict and enhance compliance with international standards. the central bank of kenya recognises that financial reporting standards play a crucial role in enhancing financial stability. on one hand, reporting standards provide the foundation for the production of credible financial statements and other disclosures that communicate the performance of the industry and at the firm level. on the other hand, disclosure of reliable information facilitates market discipline, cultivates confidence and reduces the possibility of adverse instability. the credibility of information allows market participants to process the right information and make appropriate decisions, thus a good signalling mechanism. disclosure of information, however, should not compromise proprietary data, but must be flexible enough to accommodate future advancement in risk management. such outcomes therefore, have obvious implications for the supervisor ’ s ability to oversee the safety and soundness of financial institutions. it is necessary for banks and non - bank financial institutions to prepare quality financial statements so that shareholders