are earmarking a relatively greater share of their fiscal space to build their resilience to physical and transition risks. in parallel, on the funding side, the sustainable bond market continues to develop rapidly. these instruments serve as a catalyst for mobilising capital towards projects that address environmental, social, and governance ( esg ) challenges. the esg debt universe is fast approaching the $ 5 trillion mark, up from $ 3. 4 trillion in 2021. many of you will recall that at the cop 26 in glasgow, governments committed to finance the transition to a greener future. as an international financial centre ( ifc ), we ambition to evolve as a green finance hub for the region as well. 2 / 3 bis - central bankers'speeches in this respect, the bank of mauritius has been very active in promoting the sustainability agenda amongst its regulatees. in june 2021, we released a guide for the issue of sustainable bonds paving the way for the issue of green and sustainable bonds in mauritius. we also established our climate change centre in october 2021 and in june 2022, the guideline on climate related and environmental financial risk management was issued. in the area of reserves management, we have also embedded sustainability considerations in our internal investment strategy. in the journey that we are charting for mauritius as an ifc of choice in sustainable finance, banks – locally and regionally – will have a critical role to play. i would here make an appeal to all banks not to shy away from exploring opportunities on this new trajectory and join us in creating more depth and breadth for sustainable and esgrelated finance for our continent. i also wish to take this opportunity to make a call on all african central banks and nonbanking financial services regulators to join hands in the region in creating the appropriate regulatory regime to support the development of sustainable finance in the region. ladies and gentlemen, proper management of sovereign debt requires cross - fertilization of sound policies and discipline from related policy areas, including fiscal and monetary policy. i have no doubt that the topics on the agenda for this 2 - day workshop will spark enriching and interactive exchanges and promote further dialogue amongst relevant stakeholders. i understand that more than 200 delegates are joining us virtually from many parts of the world as well. i look forward to collaborating with the oecd on such workshops of high pertinence to our region in future. before finishing, i would like to thank the members of the governing board and the staff of the regional centre of excellence

the way for credit institutions to be treated like all other private sector corporations : shareholders and creditors risk losing their money and management their jobs. to get it right, we need to ensure that the interests of shareholders, creditors and management are aligned with those of society. it is therefore essential that policy - makers stand by the directive. there is no room for exceptions. there is no room for hesitation. and we should not surrender to sceptics. once you question the directive, incentives are distorted and tax payers'money is back on the line. * * * second, even if banks can fail there are still externalities in the system. we need to limit risks from procyclical behaviour of borrowers and lenders. in good times, lenders and borrowers may be too optimistic and take on too much risk. in bad times, highly indebted households can amplify boom - bust dynamics by reducing consumption. this may have negative implications for the real economy. as the danish economy recovered, several measures have been implemented targeting new housing loans. this has been done to address the procyclical effect of over - optimistic borrowers and lenders at an early stage. page 2 of 5 the goal has not been to control house prices. the goal is to ensure the resilience of borrowers. and thereby increase the banks'robustness. it is crucial to evaluate the effects of such measures. there is a clear need for more research in this field both by central banks and by academics. today, we have published an analysis of the effects of initiatives that were taken in early 2016. the initiatives focused on housing loans in the two largest cities in denmark ; copenhagen and aarhus. they included restrictions on lending to highly leveraged borrowers. our analysis indicates that the initiatives have contributed to reducing new lending to highly leveraged households. but the effects have been modest. however, we already anticipated this result. so in 2017, the danish systemic risk council recommended additional measures. this resulted in restrictions on available loan products for highly indebted households. * * * third, the tag line of this conference is " while the sun is shining, prepare for a rainy day ". and today the sun is shining. at least from a danish perspective. we can happily say that the real economy is in a balanced upswing. however, we also see that risks are building up in the financial system. so there is no doubt – this is the time to build strength.