order to see the big picture. this is rather like central bankers and supervisors analysing ﬁnancial stability as a whole rather than individual institutions. action was needed from a macroprudential perspective, and germany activated the countercyclical capital buffer for the ﬁrst time in july. this ensures banks build up additional reserves when times are good and thus boosts their resilience to periods of stress. when times are bad, supervisors can lower the buffer again so that banks can then use this leeway to cover their losses. in other words, the countercyclical capital buffer has a stabilising effect and helps the banking sector to better absorb shocks. 5 green finance ladies and gentlemen, risks, interactions and keeping sight of the big picture are critical factors when it comes to another topic, too : climate change. when alexander von humboldt witnessed the environmental damage caused by plantations on his travels in venezuela, he was able to join the dots and warned of the human impact on the environment and its consequences for future generations. in particular, he noted the important role played by the forest in cooling the air, storing water and protecting against soil erosion. climate change is a challenge that we all face. christine lagarde, president of the ecb, has said that all public and private institutions should act, within their mandates, to address it. the ﬁrst “ gruner pfandbrief ” was issued back in 2015, even before the paris agreement was signed. without wanting to ﬂatter, it is now safe to say that this product innovation, which was designed to ﬁnance energy - [UNK] buildings, was a little ahead of its time. https : / / www. bundesbank. de / en / press / speeches / consistency - as - a - mandate - 816296 5 / 9 11 / 29 / 2019 consistency as a mandate | deutsche bundesbank the green bond market as a whole can make a substantial contribution to ﬁnancing environmentally friendly projects. in germany, sustainable investment has risen by over 70 % in the past four years. what is more, strong market growth can be observed globally as well. [ 15 ] and yet the role played by green ﬁnance remains fairly small. green bonds account for only just 2 % of the international market as a whole. in other words, green ﬁnance probably still has considerable potential. a key requirement here is a clear, generally accepted deﬁnition of what “ green ”

the cost structure of skill - based services. • it is now feasible to “ unbundle ” production of different types of goods and services. india does not necessarily have to be a low - cost producer of certain types of goods ( e. g., computers or discs ) before it can become an efficient supplier of services embodied in them ( e. g., software or music ). at the same time, it must be recognised that the “ death of distance ” and the growing integration of global product, services and financial markets in recent years have also presented new challenges for management of the national economy – not only in india but all over the world. the trend towards integration of markets, particularly financial markets, is by no means an unmixed blessing. unlike the old days, a heavy price may have to be paid by national economies for somnolence, sloth and non - conformity to generally accepted international norms and standards of macro - economic management, disclosure, transparency and financial accountability. another consequence of recent global trends is the greater vulnerability of national economies to developments outside their own borders. a crisis in any one or a group of countries, can be transmitted to other countries – including countries which may not have any strong economic linkages with crisis - affected countries. thus, the ’ nineties have been marked by a large number of currency crises ( for example, in mexico, russia, east asia and brazil – and currently argentina and turkey ) ; substantial swings in exchange rates ( including the exchange rate of three leading currencies – the dollar, the euro and the yen ) ; and run ups in asset prices followed by sharp collapse ( for example in japan and east asia earlier and the united states last year ). while the crises initially occur in one or two specific countries, their adverse effects are felt across the world. while we must be careful, on the whole, in my view, – the death of distance, the services revolution, and the mobility of capital – which characterise globalisation – present unprecedented opportunities for india. the primary source of comparative advantages today are : skills and ability to adapt and change. and, india has the advantage – of skills, of entrepreneurship and of managerial competence in taking advantage of these changes. if what i have said is correct, then, why are we not jumping with joy and optimism? why are we so “ unglobalised ” in terms of our share in trade, investment or communication? transition from a closed to a