##ing, additional capital buffers linked to pds. • eighth, an additional challenge for the emes is that they are exposed to the volatile international capital flows necessitating suitable regulatory policies depending on the macro economic conditions for ensuring financial stability. • finally, for countries like india, the advantages of coming in late is that while introducing new products and instruments one can have the benefit of the global experience so that the pitfalls can be avoided while reaping the gains of innovation. thank you. references world economic outlook, ( 2009 ) : international monetary fund, april. world economic outlook ( 2009a ) : international monetary fund, update, july. global financial stability report ( 2009 ) : international monetary fund, april.

centuries, and this may make the data collection exercise quite difficult and the outcomes more uncertain. 15. the fourth and final building block consists of initiatives which are being undertaken or planned by the regulators and supervisors to facilitate transition. in a way, this is a culmination of the work taken up under the three building blocks discussed above. the regulators may need to fine tune the existing prudential policies to integrate the climate risks into the regulatory frameworks. at the same time, from a supervisory perspective, the expectations may have to be set and communicated to all regulated entities regarding climate - related risks, encompassing organisational strategy, governance, risk management and assurance functions. the global efforts undertaken so far seem to suggest that integrating climaterelated risks and capturing them by fine tuning existing prudential frameworks may be possible. 16. the basel committee on banking supervision ( bcbs ) has published principles for the effective management and supervision of climate - related financial risks in june 2022. in october 2022, the financial stability board ( fsb ) published its final report on supervisory and regulatory approaches to climate - related risks. earlier in march 2022, the ngfs published a ‘ statement on nature - related financial risks ’, which acknowledges that failure to account for, mitigate, and adapt to naturerelated risks could have significant macroeconomic implications and become a source of financial stability risk. while guidance has been made available, regulated entities may need time, resources, and capacity to integrate climate - related considerations into their decision - making frameworks and customer facing business lines. private sector initiatives 17. in the private sector, decarbonization and digitalization are emerging as megatrends that could compel sectors and corporates to undertake structural changes and fundamentally alter their traditional business models. it is heartening to note that some of the leading indian companies in the hard to abate sectors like steel and cement9, for example, are working on an ambitious decarbonization agenda aimed at reducing the carbon footprint in their production process. 9 the steel and cement sectors are energy and emission intensive. they are also hard - to - abate, meaning that decarbonization of these sectors requires deep systemic changes in the way these materials are produced, used, and recycled. 18. banks and financial institutions may have to to step up their engagement with their corporate customers on ensuring sustainability - focused financing and other support services to help them transition towards a low - carbon economy while reducing their own carbon footprint.