zealand climate change research institute, and niwa niwa ( 2019 ) coastal flooding exposure under future sea - level rise for new zealand. accessed at https : / / www. deepsouthchallenge. co. nz / projects / national - flood - risks - climate - change. a second study, of modelling flooding from rainfall and rivers, estimated that around 411, 000 were currently exposed along with 20 airports and 3400km of electricity transmission lines. niwa ( 2019 ). new zealand fluvial and pluvial flood exposure. accessed at https : / / www. deepsouthchallenge. co. nz / projects / national - floodrisks - climate - change reserve bank climate change strategy working together to strengthen resilience, develop culture, and support economic recovery, a speech delivered by assistant governor simone robbers to the 16th financial markets law conference on 22 oct 2020 reserve bank annual report 2019 – 2020 ( see page 28 ) training our supervisors in climate - related risks and are integrating climate risks into our supervision frameworks. societal transformation at a societal level, change can be incremental or driven by a shock. for example, right now, the covid - 19 pandemic is a shock causing global change. from a financial perspective, covid - 19 has again highlighted why we need to guard against systemic risk. 10 the inescapable nature of the current global health crisis has parallels for what climate change may have in store for us. we need to think about the challenges and opportunities that lie ahead. we have opportunities for a more sustainable economic recovery form the ravages of covid - 19 by rebuilding our economies in a more environmentally sustainable manner. to build a more sustainable economy globally we are going to need all hands on the pump. public and private sector knowledge and capital must be mobilised together. no one party can afford to tackle the challenge alone. the un environment programme estimates, for example, that global greenhouse gas emissions must be cut by 7. 6 % a year from now until 2030 to meet a 1. 5°c temperature goal. 11 the international energy agency estimates that such action will require us $ 3. 5 trillion per annum until 2050 for energy sector investments alone. 12 collaboration and co - investment is necessary. after all, we live in a world with a global glut of savings and massive infrastructure deficits. we need to connect capital and opportunities. work is already underway in our pacific region – but it

and innovation by allowing wider participation in the system, while at the same time continuing to manage system risks. on the wholesale front, recent international regulatory developments have been impacting new zealand players, irrespective of our own regulatory framework. for example, while not a member of the g20, new zealand financial institutions are affected by the g20 requirements relating to otc derivatives. many of the derivative counterparties of new zealand banks are required to centrally clear and so new zealand banks are ensuring that they have the same capability. the nz banks are also being captured by new reporting requirements being applied to their parents. we continue to monitor developments in this area and so far have bis central bankers ’ speeches not mandated central clearing / reporting. this is a difficult issue for a small country where the relevant fmis sit in offshore jurisdictions. it underlines the increasingly global nature of payments, and the need for our payments oversight function to be seen in the global context. conclusion the payments industry landscape is more fast - changing than ever, with customer preferences and technology advances driving innovation in the retail space and international regulatory developments adding further impetus for change in wholesale fmis. increasing complexity and use of the internet are adding to risk in retail systems which must be managed carefully by system participants. most major countries have moved since the gfc to strengthen their regulatory oversight of payment systems, with an emphasis on large systemic infrastructures. internationally developed principles for fmis have been widely adopted, including by new zealand. the bank is looking to strengthen its oversight regime in order to fully apply the principles to systemic fmis. at the same time, new zealand ’ s oversight regime will remain at the low intensity end of the international spectrum. the reserve bank ’ s approach to payment system oversight is not to be prescriptive in terms of future payments system architecture. nor does the bank want to force cooperative “ utility ” solutions on the industry which could inhibit innovation and competition. however, it is important that the industry has a high level governance structure that facilitates competition and innovation by allowing access to new participants, and gives all participants an input into the strategic direction of the industry. payments new zealand is the key governance body in this regard and its challenge is to find the right balance between openness and competition on the one hand, and the integrity of the system and its participants on the other. we will continue to follow governance developments with close interest. thank you. bis central bankers ’ speeches