to go beyond their traditional role as a liquidity provider, and to engage themselves in complementing and enhancing market functions. 2 central banks ’ response to market dysfunction this was in fact what four major central banks ( fed, ecb, boe, boj ) and others did during the last two years in addition to a series of policy rate cuts down to the proximity to zero. market dysfunctions and severe strains on a banking system significantly reduced the effectiveness of an ultra - low policy rate, which was evident in our experience of japan ’ s lost decade. thus, unconventional policies were devised and implemented essentially as measures to support and enhance the effects of ultra - low policy rates on prices and economic activities. first, in order to ease confidence erosion and tension in money markets, the central banks conducted ample and enhanced liquidity provision by offering more frequent operations, to for concise comparison of the two crises, see nishimura, k. g., “ ‘ the past does not repeat itself, but it rhymes ’ : four lessons learned from the financial crises, ” remarks at the panel session “ responding to the financial crises : lessons learned ” at the 45th annual conference on bank structure and competition sponsored by the federal reserve bank of chicago on may 8, 2009, available on line at http : / / www. boj. or. jp / en / type / press / koen07 / ko0905a. pdf. in other words, central banks had to act as a “ plumber ” to fix broken and clogged pipes to facilitate liquidity going through the system. see shirakawa, m., “ financial system and monetary policy implementation : long and winding evolution in the way of thinking, ” opening speech at 2009 international conference hosted by the institute for monetary and economic studies, available on line at http : / / www. boj. or. jp / en / type / press / koen07 / ko0905e. htm more counter parties, at longer maturities, and against broader collateral. this was more applicable to the period of august 2007 to august 2008. then, as the erosion of confidence intensified after the failure of lehman brothers and market dysfunctions and financial distress became more pronounced, the central banks began intervening in specific market segments to support market functioning by measures including the introduction and expansion of asset purchase programs for commercial papers, corporate bonds and government debts. also, the fed expanded swap lines with other central banks to enable

when conducting monetary policy, central banks need to assess the economic situation and price conditions. this assessment should no doubt take into account climate change and the effects of government policy responses to climate change. whether a central bank should be more proactive in introducing measures to support sustainable finance deserves further discussion in the context of the central bank's mandate and the market neutrality of monetary policy measures. these issues relating to monetary policy will not be discussed in detail at this workshop. nevertheless, they are important topics, and the bank of japan will continue to explore them. climate change and financial system stability, the topic of this workshop, has come to be recognized as an important issue to be addressed by central banks, as climate change could destabilize the financial system in the medium to long run. ii. increasing understanding of climate - related financial risks against this background, there has been remarkable progress in the understanding and management of climate - related financial risks. this progress is due to the work of participants in this workshop today, along with policy makers, academics, and the private sector, including financial institutions. in the following, i would like to note four points in relation to this progress. the first is the deeper understanding gained of the transmission channels of climate - related financial risks. the idea has become widely shared that the impact of climate change on the financial system through the real economy comes mainly through " physical risks " and " transition risks. " " physical risks " refers to the risks that physical phenomena triggered by climate change, such as large - scale disasters and rising sea levels, will cause damage to firms and households. " transition risks " refers to the risks of an economic impact on firms and households due to changes in policy, technology, or consumer preference as we move toward a low - carbon economy. the second is the methodology for measuring climate - related financial risks. as past experience is not necessarily an appropriate guide when measuring climate - related financial risks, it is difficult to rely on conventional methods to measure risks, such as value - at - risk. with this in mind, some financial authorities and financial institutions have taken the initiative in conducting research about how to measure climate - related financial risks, and have begun to explore new measurement methods, including stress tests. the third is the disclosure of climate - related financial risks. in this regard, the task force on climate - related financial disclosures, or tcfd, was created in 2015, to develop climaterelated financial risk disclosures. in the final report