central bank and the uk prudential regulatory authority. 25 the tcfr ’ s work will be helpful in strengthening supervisory collaboration across jurisdictions, which is important to banks that are internationally active. we also participate in the financial stability board ’ s ( fsb ) work on climate change. building on previous reports on climate - related risk - transmission channels in the financial system, with a particular focus on amplification mechanisms and cross - border effects, the fsb is now assessing the availability of data through which climate - related risks to financial stability could be monitored, as well as any data gaps. 26 in addition, the fsb is exploring ways to promote globally comparable, high - quality and auditable standards of disclosure based on the recommendations in the tcfd. the federal reserve recently became a full member of the network for greening the financial system ( ngfs ), a network of more than 80 central banks and supervisory authorities from around the world that focuses on sharing research and identifying best practices to ensure the financial system is resilient to climate - related risks. through the ngfs, we are engaged in work on the microprudential and macrofinancial impacts of climate change, trends in green finance, data gaps, and research. in wrestling with the many complexities and challenges related to climate change, there are likely to be significant opportunities for collaboration with the private and european central bank, guide on climate - related and environmental risks : supervisory expectations relating to risk management and disclosure, ( frankfurt : ecb, november 2020 ), https : / / www. bankingsupervision. europa. eu / ecb / pub / pdf / ssm. 202011finalguideonclimaterelatedandenvironmentalrisks ~ 58213f6564. en. pdf ; and bank of england prudential regulatory authority, “ managing climate - related financial risk — thematic feedback from the pra ’ s review of firms ’ supervisory statement 3 / 19 ( ss3 / 19 ) plans and clarification of expectations, ” letter, july 1, 2020, https : / / www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / letter / 2020 / managing - thefinancial - risks - from - climatechange. pdf? la = en & hash = a6b4dd1be45b2762900f54b2f5bf2f

, the liquid asset buffer ( lab ) is a reserve of high quality liquid assets which banks hold in normal times to manage a 30 - day period of liquidity stress. using its lab in a stress can thus give a bank breathing space to meet extraordinary demands for cash without taking actions that may be damaging to the wider financial system and real economy. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice chart 2 illustration of different capital requirements and buffers releasability and usability it is important that all of the buffers outlined above play their role, if necessary, in allowing banks to maintain lending whilst absorbing losses. whether and how that is enabled rests on two key concepts : releasability and usability. a regulatory buffer is releasable when the authorities can reduce it – including down to zero if need be – freeing up additional resources. the ccyb is a good example of this. in the uk, the fpc released it during the early covid period, increasing the size of firms ’ management buffers. the fpc was able to do so because of its policy i mentioned a moment ago : it maintained a non - zero uk ccyb resting rate in normal times, which was its assessment of the financial system before the pandemic struck. 10 a regulatory buffer is said to be usable if banks will dip into it when faced with shocks – that is, they will willingly allow their capital ( or liquidity ) ratios to decline below it – without taking actions that could have undesirable consequences either for micro - prudential resilience or for macro - prudential stability, including restricting lending to the real economy in a way that amplifies the initial adverse shock. in practice, there is an observable spectrum of usability ( chart 3 ). see bank of england ’ s december 2019 financial stability report ( pg 8 ) all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice chart 3 : spectrum of usable and releasable buffers at the more usable end are management buffers : firms can dip into these with no regulatory consequences, although even here they may be reluctant to do so. that reluctance may stem from their internal risk appetite and / or because the market judges that regulatory buffers are insufficient to absorb losses. at the other end is the