the implications of these choices may be for the diversification of our portfolios. second choice : finding the right people and creating the right processes to make this work. that means recruiting the appropriate capacity and competences and reorganising our organisations. that means defining new or additional kpis to also reward decisions that contribute to impact goals and put less emphasis on classical views, like the markowitz modern portfolio theory. third choice : being more transparent about what you do and the results you are aiming for. that means : moving away from the short - term focus that keeps you locked in the past and present, towards a sustainable, long - term future. 2 / 4 bis - central bankers'speeches however, it's not only the financial sector that has to make choices. like i said : it's undeniable that policymakers, regulators and the financial sector are mutually dependent. these upcoming national elections are therefore important. because to make the transition to a sustainable future a success, or even a possibility, we need a government with a clear long - term vision of sustainability. not only at the national level, of course, but also at the international level, where global standards and a unified approach to the big issues are sorely lacking. a global setting investors can have confidence in and build on. policy stability and a clear destination are key conditions for financial institutions to embark on the road towards sustainability and of course, central banks and supervisors have their role to play, their responsibility to take, their choices to make. we may not sit in the driving seat ; we are definitely part of the team : as a supervisor and regulator and as a watchdog over monetary and financial stability interests. the latter will clearly be threatened by a disorderly transition. today i want to elaborate on these roles in a more holistic and integrated way. in our role as supervisors and regulators we make sure that financial institutions identify, recognise and mitigate climate and nature - related risks, and – should risks materialise – prevent them from having serious consequences. risks that – we must acknowledge this – not only involve the mitigation of climate change and nature degradation or risks stemming from sudden transition policies, but that also require us to adapt to risks and realities that can no longer be avoided. risks our planet is already facing every day, like extreme heat and drought that cause wildfires, or torrential rains that cause floods. risks that have financial consequences for our food supply, health and housing ; for insurance and

prudential supervisors ’ main concern is the safety and soundness of financial institutions, conduct of business supervisors first and foremost strive for a fair and transparent market. undeniably both types of supervision are important and in fact they are generally reinforcing. let me give an example to illustrate this. in the united states, home loans were extended to very risky borrowers, with little or no income and few, if any, assets. from a conduct of business perspective, these us consumers were not treated fairly. had this practice been stopped in time by the relevant conduct of business supervisor, we would have fewer problems now. unfortunately practice did not stop, but rather worsened. and now these us mortgages are awfully problematic from a prudential point of view. that being said, prudential and conduct of business supervision can also be conflicting. prudential supervisors work most effectively behind the scenes. this contrasts with conduct of business supervision, which benefits from being in the public eye. publicity helps to warn off consumers, investors and the industry from misconduct and wrongful practices. if both types of financial supervision are exercised by the same organization, there is the risk that an inappropriate balance is struck. therefore, in integrated supervisory authorities, arrangements can and should be made to ensure the necessary amount of resources is allocated to both types of supervision. establishing such arrangements, however, can be rather challenging in practice. indeed, a key finding of the uk fsa ’ s internal audit review in light of northern rock was that too many resources had been allocated to conduct of business supervision, and too few to prudential risks. in the netherlands, and also in australia, the danger that either prudential or conduct of business supervision will be overlooked has been addressed institutionally. in our objectivebased supervisory arrangement, prudential and conduct of business supervision are performed by two separate institutions. the former type of supervision is the responsibility of dnb ; the latter is the remit of the dutch conduct of business supervisor, the authority for the financial markets. consequently, our institutional set - up leads to a transparent consideration of prudential interests on the one hand and conduct of business interests on the other. let me give a clear example to illustrate this point. some years ago a dutch subsidiary of a foreign bank had neglected its duty of care. from a conduct of business perspective, the bank had to be penalized for this. it was clear, however, that this would entail the end of