due to data gaps and a lack of harmonised analytical tools. with respect to climate change, the uncertainty is perhaps even greater, as it is difficult to know how and when climate - related risks will materialise. given the inherently cross - border nature of activities and risks in all these areas, global coordination and consistency are of the utmost importance to avoid risks merely shifting elsewhere. so how should we approach these new frontiers? let me highlight some considerations for macro - prudential policy in nbfi, as this is probably the area where discussions are most advanced at this stage. as in the banking sector, macro - prudential policy for nbfi should seek to prevent the build - up of risks, make the financial sector more resilient and limit contagion by focusing on the system as a whole. however, although the objective is similar, the approach may be different. this is due to the nature of systemic risk in nbfi. taking the example of investment funds : whereas systemic risk in the banking sector often revolves around the solvency of individual entities, systemic risk in the investment fund sector generally revolves around liquidity imbalances arising as a result of collective actions of cohorts of funds generating sharp spikes in liquidity demand. therefore, the practice of applying higher requirements to systemically important institutions, such as higher capital buffers, is unlikely to be the central feature of macro - prudential policy in nbfi. a macro - prudential approach to investment funds should therefore primarily be activitybased, rather than entity - based, and include requirements applying to all entities within a specific cohort, regardless of their individual systemic relevance. in this way, macroprudential policy would presumably raise the baseline of existing micro - prudential requirements at the fund level by embedding the macro - prudential perspective. this would allow funds to internalise their potential impact on the wider financial system. looking ahead, i see three components in the evolution of macro - prudential policy for nbfi. 3 / 4 bis - central bankers'speeches first, we should finish important parts of the ongoing work to address structural vulnerabilities. following the march 2020 market turmoil, analytical and policy work at the fsb level has focused on enhancing mmf resilience, liquidity mismatch in openended funds, the excessive use of leverage, and liquidity preparedness in the context of margin calls. work is still ongoing in

klaas knot : introductory remarks - ecb fifth macroprudential policy and research conference introductory remarks by mr klaas knot, president of the netherlands bank, at the european central bank fifth macroprudential policy and research conference, jointly organised with the international monetary fund, frankfurt am main, 17 october 2023. * * * many thanks for the kind introduction, tobias. it is a pleasure to be here. i have little time to cover a fascinating and complex topic, so let me focus on just a few high level issues regarding the effective use and the challenges of macro - prudential policy. we tend to forget that macro - prudential policy is still a relatively new field of work that originated from the great financial crisis. at that point in time, we first needed to design tools to fix the faultiness in the system. the focus then shifted from design to implementation. the challenges of macro - prudential policy are therefore evolving. and now we are at a stage where the onus lies on actually using the tools and to evaluate their effectiveness and efficiency. including in the face of new risks. so what i intend to do in my opening remarks is to first discuss some of the challenges in implementing the existing macro - prudential toolbox, where i will mainly draw on our experiences within the eurosystem. i will then move on to the new frontiers of macroprudential policy development, which are arguably global in nature and where the fsb, jointly with the imf, has a leading role to play. challenges on the challenge of using macro - prudential tools, there is still room for improvement. for instance, euro area jurisdictions differ in how they apply macro - prudential tools in practice. in europe, we have a harmonised framework for identifying d - sibs. there is however no further guidance on buffer calibration. as a result, two banks with similar scores for indicators of systemic importance such as size - to - gdp, interconnectedness, and lack of substitutability, can end up facing quite different requirements. most big banks in the euro area fall in a range of d - sib allocations of roughly 1 - 2. 5 % of risk weighted assets, but some allocations bear no apparent relationship to the scores that were assigned. i think it is important to further investigate such heterogeneity and what mechanisms could be put in place to correct for this in order to ensure