led task force at cop21. chaired by michael bloomberg, it is in the process of developing consistent, comparable, reliable and clear disclosures around climate - related financial risks. the task force has just published its phase 1 report for public consultation in advance of its final recommendations to g20 leaders over the next year. 11 improved private disclosure will also support public climate action. better information will allow policymakers to assess companies ’ speed of adjustment relative to countries ’ nationally determined contributions ( ndcs ). it will support more informed policies, including early responses if there are clear shortfalls. virtuous circles could be more quickly established. if governments build credibility by implementing their ndcs, this will raise the probability of further action to achieve 2 degrees. markets can then do what they do best and pull forward that adjustment. early awareness of the risks and opportunities associated with a low - carbon economy will attract mainstream institutional capital. that impact will be maximised if there are the right vehicles. in this regard, green bonds have the potential to align the interests of issuers and investors. to investors, green bonds offer a stable, rated and liquid investment with long duration. to issuers, they could tap the us $ 100 trillion global institutional fixed income investor base. moreover, the shift to the capital markets from banks will free up limited bank balance sheet capacity for early - stage project financing and other important infrastructure lending. at present, with less than one percent of outstanding bonds globally being “ green ”, the g20 is considering initiatives to catalyse this market, including : • developing a “ term sheet ” of internationally recognised standardised terms and conditions to make issuance more efficient ; • creating voluntary certification and validation frameworks to give certainty to issuers and investors that a project is “ green ” ; • integrating environmental risk and green certification into credit ratings ; • developing green bond indices to unlock the potential power of passively managed investments ; • standardising and harmonising principles for green bond listings to promote resilient and efficient trading and adequate liquidity ; and the ipcc estimates that additional investment of us $ 190 – 900bn is required annually in the energy sector alone if the rise in average global temperature is to be capped at 2c. www. ipcc. ch / report / ar5 / mercer estimates that additional cumulative investment in efficiency improvements, renewable energy, biofuels and nuclear, and carbon capture and storage could be in the range of us $ 3 - 5 trillion by 203

. data is also needed to track the terms of transactions, including maturity and haircuts. one interesting idea is for regulators to run exercises in which they ask prime brokers to calculate portfolio haircuts against archetypal leveraged portfolios. the aims would be both to track any loosening in market - wide standards over time and to spot outlier dealers that require lower haircuts than their competitors. these significant regulatory reforms will have consequences for the behaviour of dealers and investors in securities financing markets. some market participants may seek ways around the new regulations : for example, there has been talking about dealers “ renting ” balance sheet from other market participants or establishing off - balance sheet financing vehicles. the flipsides of more resilient dealers and markets in periods of stress may well be less leverage, less maturity transformation and lower dealer inventories in more normal periods. the balance is not easy to strike ; we may need to readjust our approach as we learn. but the goal of these reforms is clear : to make securities financing markets resilient. robust securities financing markets should help to stabilise rather than destabilise the financial system in the face of shocks. the reduction in dealer inventories has attracted a lot of comment, with questions about whether they will be willing and able to provide liquidity as market makers in falling markets on the same scale as in the past. but the role of dealers in providing stable financing to leveraged investors may be equally important. those investors may be the most likely to see a market crash as a buying opportunity – but only if they are not over - leveraged and have access to borrowing from financially - sound dealers. put another http : / / www. bis. org / publ / bcbs270. pdf. http : / / www. bis. org / bcbs / publ / d295. pdf. http : / / www. bis. org / publ / bcbs238. pdf. in october 2014, the fsb published strengthening oversight and regulation of shadow banking : regulatory framework for haircuts on non - centrally cleared securities financing transactions ( http : / / www. financialstability board. org / publications / r _ 141013a. pdf ). bis central bankers ’ speeches way, we want dealers and leveraged investors to be providers not demanders of liquidity in a crisis. references gorton, g b, metrick, a, & xie,