firmlevel disclosures provide a good starting point that provide the basis that supervisors and regulators can build upon for the development of standardised regulatory reporting requirements. a concern we often hear from financial institutions – with good reason i would say – is to ask authorities in different jurisdictions to standardise reporting where possible. as we put in place these new reporting requirements, we have an opportunity to ensure that they are well standardised from the start. let ’ s take this opportunity. scenario analyses are currently one of the most effective supervisory tools. they promote a more sophisticated understanding of risks by financial institutions, and how these risks connect with transition scenarios. our consultation report encourages the expanded use of climate scenario analysis and stress tests to incorporate system - wide aspects of climate - related risks such as indirect exposures, risk transfers, spillovers and feedback loops. our report also introduces some early thoughts on the use of macroprudential tools, which is still at a nascent stage. it highlights the early work of jurisdictions to develop macroprudential approaches and calls for further research to be undertaken to assist as we continue our journey to develop our macroprudential policy toolbox. our public consultation closes at the end of june, and we would welcome your feedback by then. the final report will be published in october. it is almost a year now since we published our roadmap with its wide - ranging set of actions. to be more precise, coordinated actions by both public and private - sector players, to address climaterelated financial risks. to emphasise that point : the roadmap is deliberately designed as a joint endeavour. we need to combine our efforts for an efficient and comprehensive response to climate risk in the financial system. the fsb ’ s upcoming progress report, which will be submitted to the g20 in july, will provide a stocktake of how far we have come and what the next steps should be. let me wrap up. the swans i see on the amstel river, the ones that have a calming, mesmerizing effect on me are, of course, not the green swans this conference refers to. nevertheless, they have some important commonalities. the gracefulness of a swan obscures what happens beneath the water ’ s surface. it conceals what it takes to propel action. it makes the hard look easy. in the same way, a graceful climate transition requires urgent action under the surface. as policy makers, we must ensure that the move to

process. a major step forward in the convergence of supervision in europe can be achieved through the lead supervisor model. as you will know, the lead supervisor model was launched by the european financial services roundtable in 2003 / 2004. under this model, the home supervisor is made responsible for supervision of an entire financial firm, including its foreign subsidiaries, while recognizing the need for an important role for the host supervisor. indeed, in my view the lead supervisor model requires a close working relationship between the host and the home supervisors so as to achieve effective supervision. the home supervisor, referred to as the lead supervisor, is given final authority to set the reporting requirements for the entire group, to coordinate the validation of its internal models at the group and local levels, as well as the planning of on - site bank inspection regimes, and to co - ordinate the authorisation process. the concept of lead supervision promotes greater efficiency. moreover, the lead supervisor model also fits in with the continuous integration – or perhaps i should say globalization – of the financial sector. after all, europe is part of the global financial market, and many large financial players, notably also in the netherlands, have expanded far beyond the european frontiers. dnb believes the lead supervisor model can properly support the interests of market participants, which should be carefully weighed when deciding upon the future architecture of financial supervision in europe. an illustration of how the lead supervisor model can work is the preliminary high level agreement between dnb and the united kingdom financial services authority ( fsa ) regarding the supervisory consequences of a possible merger between abn amro and barclays. in this specific case, we have been able to come to good, pragmatic and transparent agreements. it has been agreed that decisions will be taken on a consensus basis where material issues affecting the combined group are concerned. in the unlikely event that the supervisors do not agree, the lead supervisor, the fsa, will have the final power of decision making. addressing the rise of hedge funds a second challenge facing supervisors today is to deal with concerns that unregulated parties such as hedge funds and private equity constitute a potential source of systemic risk. before i discuss these concerns, let me stress that both hedge funds and private equity have enriched the financial system in many ways. hedge funds provide liquidity and price discovery in many markets and have fostered financial innovation, so facilitating the distribution of risk within the financial system. private equity mobilizes risk - bearing capital for investments in companies and generally