last year set a record for weather - related insurance losses at around $ 140bn. 1 losses in 2018 may again be among the worst in history. this is an extension of a worrying pattern that has seen the number of extreme weather events more than triple and inflation - adjusted insured losses rise five - fold in the past three decades. 2 see munich reinsurance company ( 2018 ), ‘ a stormy year : natural catastrophes 2017, ’ geo risks research, natcatservice ibid. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx the outlook is even more concerning. as noted by hrh, last month ’ s ipcc report shows that many land and ocean ecosystems have already changed due to global warming. 3 it concludes that the physical risks of climate change will intensify even under 1. 5 degrees of warming, including increased heatwaves, droughts, heavy rain, flooding, melting of sea ice, and species loss. in turn, this will have a marked impact on human health, livelihoods, food security, water supply, human security, and economic growth. and that is very much the ipcc ’ s best case scenario. the impacts will be significantly worse under 2 degrees, and the paris commitments – even if fully implemented – are consistent with more than 2. 7 degrees of warming. 4 the longer meaningful adjustment is delayed, the more transition risks will rise. to deliver on the paris agreement commitments and limit temperatures to 1. 5°c, carbon emissions would have to decline by about 45 % from 2010 levels to 2030 to reach net zero around 2050. 5 even if this happens smoothly, it will have major implications for most sectors of our economies. if the transition is delayed and then happens abruptly, financial stability risks will rise considerably. given this combination of immediate physical risks and prospective transition risks, the bank of england has become increasingly active consistent with our financial stability and prudential mandates. in 2015, we examined the impact of climate change on the uk insurance industry. 6 general insurers and reinsurers are on the front line of managing the physical risks from climate change, and they have responded by developing their modelling and forecasting capabilities, improving exposure management, and then adapting coverage and pricing accordingly. one of the lessons they have taken on board is that yesterday ’ s tail risk is closer to today ’ s central scenario. sadly, with respect

co. uk / news / speeches from undue risks. we will reach out to key firms and the users of payments services in the next couple of months, to understand the needs of market participants and the barriers that still exist to competition and innovation. this dialogue – along with detailed analysis of the potential benefits and impacts for monetary and financial stability - will feed into a consultation paper in 2020. we look forward to learning from the industry and will welcome your engagement in this process. rtgs renewal crucially, to deliver these priorities, and to facilitate innovation, we need strong, resilient foundations. that is why the bank is undertaking an ambitious and exciting programme to renew rtgs. for those not familiar with rtgs, it is a critical piece of national infrastructure and the backbone of uk payments. our vision is to develop an rtgs service which is fit for the future, increasing resilience and access, and offering wider interoperability, improved user functionality and strengthened end - to - end risk management of the uk ’ s high - value payment system. this is a challenging but necessary programme which is a key priority not just for the bank but for the uk payments industry as a whole. the way payments are made has changed dramatically in recent years, reflecting changes in the demands of households and companies, changes in technology, and an evolving regulatory landscape. we need to respond to this and, in collaboration with the industry, develop the next generation of rtgs that delivers a world - leading payments service. innovation can only thrive when firms and end users are confident they are operating in a safe and secure environment. so at the heart of the programme is the desire to make the new service materially stronger and more resilient to an increasingly complex and sophisticated environment. our current system has, and meets, targets of 99. 95 % availability. this must continue regardless of the shocks, whether traditional bcp or cyber. we are building a system that will be flexible to protect against the threats we understand today and the ones we will need to withstand in the future. the renewed service will provide a platform for private sector innovation and one which can respond to and shape a fast changing environment. we will harness leading edge technology to deliver this, coupled with changes to our policies to support growth and resilience. key features will include : the renewed service will have a flexible and modular architecture, making it easier to change components of the service or add new components. this will enable us to respond quickly to