. get our house in order : monitoring and managing our own climate impacts. _ _ _ _ _ _ _ _ _ _ _ _ reserve bank of new zealand act 2021 – issuance of the financial policy remit 2022 https : / / www. rbnz. govt. nz / about - us / responsibility - and - accountability / our - financial - policy - remit monetary policy statement 17 august 2022 https : / / www. rbnz. govt. nz / monetary - policy / about - monetary - policy / history - of - the - remit - and - policy - targets - agreement climate change and inflation, see monetary policy statement november 2021 ( rbnz. govt. nz ) we asked the public ’ s views about the economy, what matters to them and how decisions that we make can affect new zealander ’ s daily lives. see https : / / www. rbnz. govt. nz / haveyour - say / closed - consultations / monetary - policy - committee - remit - review endorsement unclassified unclassified 2. get the settings in place : mainstreaming climate by understanding and incorporating the impacts of climate change into our core functions, like prudential supervision and financial system analysis. 3. show the way : leading through collaboration. climate challenges the financial system is a critical ‘ engine ’ that works to identify, price, and allocate risk. climate risks are evolving, and the market is working to come up to speed on those risks. but historically, that engine hasn ’ t fully addressed potential risks from climate change. this is partly because we simply do not know the true scope and scale of the environmental risks we take on during our daily economic activities. transition risks have also proved elusive : it ’ s hard to identify a risk when the timing and magnitude of climate policies in new zealand or overseas are unknown. likewise, many of the material costs of our economic decisions are ‘ externalised ’, that is, borne by others including future generations. solving the moral hazard of transition costs falling on the present generation, while the benefits of those actions ( in reduced climate impacts ) accrue to future generations, has proved a tall order. what this means is that we will never have perfect information on the risks of climate change. however, the mandatory climate - risk disclosure standards being developed by the external reporting board ( xrb ) and to be independently monitored and enforced by the financial markets authority ( fma ) will help start closing some

the half - year to march 2011, and these banks have made additional provisions in the region of $ 125 million – well under 0. 1 percent of their total lending. bis central bankers ’ speeches overall, there still remains a great deal of uncertainty in quantifying the effects of the earthquakes. provisioning estimates have been based on many unknowns, and these will be subject to change as the insurance climate and other uncertainties become clearer. as the regulator for insurers, the reserve bank is now responsible for overseeing the introduction of new prudential requirements for insurers, including new solvency standards, fit and proper requirements for directors and other senior officers, and a requirement that insurers have appropriate risk management programmes. all insurers wanting to continue insurance business in new zealand must obtain a licence by march 2012. it is well known that one large insurer ( ami ) has faced financial difficulties associated with meeting the large value of claims, while some small niche insurers have indicated they intend to selectively withdraw coverage nationally or from certain regions. insurers remain cautious about writing new insurance in this environment. balance sheets of other insurers have been significantly impacted, in some cases requiring more capital, and shareholders, including foreign owners, are providing this, as is appropriate. the reserve bank continues to monitor the effects on balance sheets in the insurance sector. our focus is on the soundness of the sector, and so we are particularly interested in levels of existing and future catastrophe cover. we are starting to see higher global reinsurance costs being reflected in increased non - life insurance premiums for new zealand customers. we are yet to see how the industry realigns itself as a result of these events. there is the prospect of some consolidation with the purchase of ami by iag ( subject to regulatory approvals ), and we are seeing changes to reinsurance capital requirements and availability of insurance. we can expect that there will be changes, and that the industry will adjust. new zealand is well - placed in that insurance will fund the majority of the costs of the canterbury earthquakes, and most of this funding comes from large offshore reinsurers. new zealand is unusual in its degree of insurance and re - insurance. in other parts of the world, such as japan, government, businesses and households have borne a much greater share of disaster costs. the wider impacts of the earthquakes following the earthquakes, we saw sharp declines in consumer confidence and business sentiment throughout the economy. short