. g. its longterm profitability or also its risk management keeping pace with expanding business? does it suffice to confront bank managers with those issues at the annual regulatory meeting? are targeted on - site inspections the best way forward? existing supervisory standards do set the right framework, but supervisors might need clearer guidance in order to exert the necessary amount of pressure on the supervised entity. 3 where do we stand? so where do we stand today? although sustainable finance is no longer an entirely new topic, it is still difficult to grasp. at the 1 / 4 bis central bankers'speeches same time, we are clearly moving beyond great political speeches. to supervisors, tackling sustainable finance means tackling environmental, social and governance ( “ esg ” ) risks ; here, we have so far mostly but not exclusively focused on climaterelated risks. much of the pioneering work at the international level is being done by the members of the network for greening the financial system ( ngfs ). compared to about one and a half years ago, when the newly founded ngfs entered into its productive phase, we have certainly made good progress. we have built a broad consensus that esg risks, in particular climate - related risks, are financial risks. and we have started analysing regulatory implications and setting supervisory expectations. but we are still in the process of developing an understanding of the channels through which these risks could materialise, from both the micro - and macroprudential perspectives. unlike other risk factors, the way climate change - related developments including policy measures will impact the macro economy is not well understood. our current activities could be considered as “ sensitivity analyses ” exploring potential vulnerabilities of the financial system under different assumptions. of course, the objective of the global efforts on the part of central banks and supervisors is to add stress tests or scenario analyses to our toolbox. therefore, the crr ii and crd v contain not only new disclosure provisions but also mandates for the european banking authority ( eba ) to examine the integration of esg risks into pillar 1 and pillar 2. work on pillar 2 has already started and is being conducted jointly by the eba and national competent authorities ( ncas ) in the eba sustainable finance network. here in germany, a guidance note on the treatment of sustainability risks by financial institutions drafted by bafin is currently up for public consultation. other countries have already published supervisory statements. but : if you were to randomly pick a local

jens weidmann : academic colloquium in honour of prof. dr. dr. h. c. mult. otmar issing video message by dr jens weidmann, president of the deutsche bundesbank and chair of the board of directors of the bank for international settlements, at the center for financial studies ( cfs ) in cooperation with the leibniz institute safe, virtual, 29 june 2021. * * * 1 introduction it is a great pleasure for me to speak at this academic colloquium in your honour, celebrating your 85th birthday. i would have very much liked to offer my congratulations to you in person, but unfortunately this is not possible due to my commitments at the bis. paying tribute to such an outstanding central banker, academic, and personal friend such as yourself, otmar, within the space of just five minutes, is an almost impossible task. 2 lifetime achievement there is no question that you are one of the most renowned central bankers of our time – and rightly so. last year, the “ central banking ” magazine honoured you for your lifetime achievement. and, indeed, you have achieved so much over the course of your career. you have shaped the landscape of monetary policy in europe like few others. to this day, the bundesbank and the ecb are still reaping the benefits of your legacy. it was your initiative, for example, that led to the creation of the research group that essentially formed the nucleus of the bundesbank ’ s research centre today. without a doubt, the greatest distinction of your career is that you successfully guided the then brand new ecb as its chief economist. you played a key role in building up the ecb ’ s credibility and reputation as an institution focused on maintaining price stability. your master stroke was the formulation of the ecb ’ s stability - oriented monetary policy strategy. together with your team, you created this strategy from the ground up in 1998, amidst an environment of high uncertainty and within a very short period of time. while it is commonly referred to as the “ two - pillar strategy ”, it actually contained three important elements : a quantitative definition of price stability oriented to the medium term, a prominent role for money, and a broadly based assessment of the outlook for price developments. you also oversaw the review of the strategy in 2003. in essence, the strategy was reaffirmed with just a somewhat less prominent role for money and a clarified policy aim. i believe you