that external ratings awarded by rating agencies pursue different objectives – namely, a more long - term orientation towards the entire credit cycle – from internal bank ratings. the topic of “ completeness ” is naturally also of great significance in the case of internal bank systems. i assume that “ partial use ” will also be possible here. to that extent, the rating would then be incomplete. ladies and gentlemen, the debate on a rapprochement of the prudential to the economic capital of banks by the deployment of management instruments of their own naturally involves uncertainties and risks. the “ self - assessment ” by the banks planned for a substantial part of the risks in the computation of the capital to be maintained in respect of the risks incurred therefore calls for a supervisory audit of the internal bank methods used. it is at this point that the two other pillars of the new accord come into play. in particular, banking supervisors will be obliged – as stipulated by the second pillar of the discussion paper ( the supervisory review process ) – to gain a clear idea at first hand of the instruments used in banks ’ risk controlling and risk management. that applies all the more since the market can hardly function as an external monitoring body for internal bank ratings. vii ladies and gentlemen, it is not only at the international level that a “ level playing field ” must be ensured. that is scarcely less important at the national level as well. as you know, the basle accord is primarily applicable to internationally operating banks. on the basis of the basel proposals, the same subjects are being addressed in brussels, too, so that ultimately the entire banking sector will be affected by the regulations. after the implementation of a corresponding eu directive, those provisions will be binding on all credit institutions within the eu. we advocate, firstly, that the final regulations should coincide in brussels and in basel, and should come into effect at the same time. by that means, a duplication of efforts should be avoided by those credit institutions which will have to apply both sets of regulations. secondly, it is our aim that, in principle, all institutions – regardless of their size – will be able to apply the new regulations. hence, we welcome the efforts being made by the banking associations to assist their member institutions in implementing internal rating systems. it would be conceivable, for instance, for certain demands of the rating process ( e. g. the collection and processing of data ) to be satisfied centrally by the associations. that naturally gives rise to questions

sabine mauderer : getting the full picture - the road ahead for climate stress testing speech ( virtual event ) by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the 2023 european banking authority workshop on climate risk stress testing, 8 february 2023. * * * 1. introduction ladies and gentlemen, how does climate change affect the economy? what impact does climate change have on growth and inflation? how does climate change affect the financial system? policymakers need answers to these questions. understanding climate - related risks and their transmission channels is essential for designing targeted policies. central banks and supervisors have outstanding analytical capabilities. dealing with financial risks is our bread and butter business. this ample expertise can help to strengthen the understanding of climate - related financial risks. these risks are not a new risk category per se. climate risk drivers can exacerbate " traditional " financial risks and existing vulnerabilities, such as credit risks and market risks. stress tests have been an integral part of the toolbox of central banks and supervisors for a long time. stress tests provide valuable insights into the risk exposure and resilience of individual banks and the financial system. climate stress tests can complement common stress tests to give a fuller picture. 2. climate scenarios – a glimpse of possible futures stress tests are forward - looking analytical exercises that build on baseline and adverse scenarios. the same goes for climate stress tests. this is where climate scenarios come into play. climate scenarios give us a glimpse of different possible future outcomes. they can help us to understand how climate - related risks could evolve and what the implications might be for the economy and the financial system. the network for greening the financial system ( ngfs ) has developed and repeatedly refined a set of six climate scenarios. the scenarios fall into three categories and explore the impact of climate change ( physical risk ) and climate policy ( transition risk ). in the orderly scenarios, the early and gradual introduction of climate policies leads to subdued physical and transition risks. 1 / 4 bis - central bankers'speeches the disorderly scenarios assume that climate policies are delayed or divergent across countries and sectors. these scenarios are associated with higher transition risk as, for instance, carbon prices might need to rise sharply and abruptly. in the hot house world scenarios, global warming cannot be limited due to insufficient global efforts. as a result, extreme weather events become more severe and more frequent. physical risks increase drastically. all these ngfs scenarios help quantify