unquantified. the loss of natural capital exacerbates climate change. 1 / 4 bis - central bankers'speeches nature loss removes carbon sinks and disrupts natural temperature - regulating systems. conversely, healthy ecosystems help to slow climate change while protecting communities from its impacts, like extreme weather. there is growing recognition of the climate - nature nexus : that we need to protect and restore nature to achieve a net zero world and avoid catastrophic climate change. the network of central banks and supervisors for greening the financial system recognises the importance of reversing nature loss for a successful net zero transition. the ngfs was founded five years ago on the recognition that climate - related risk is a threat to the financial system and that the financial sector can play a role in enabling the transition to a low - carbon economy. we number 140 members and observers now, comprising central banks, financial supervisors, and international financial institutions from across the world. nature - related risks have material macroeconomic, macroprudential, and microprudential consequences. central banks and supervisors therefore cannot afford to ignore nature and biodiversity loss. the ngfs has produced three research papers on biodiversity and financial stability, together with the international network for sustainable financial policy insights, research, and exchange, or inspire. the research shows that nature - related shocks can transmit to the financial system. corporate dependencies on natural capital pose market and credit risks to individual financial institutions'portfolios, which can potentially aggregate into systemic financial exposures. the ngfs has thus created ataskforce for biodiversity loss and nature - related risks, to help mainstream nature - related financial risks across our work on supervision, financial stability oversight, and monetary policy. the taskforce will develop a comprehensive framework to identify the transmission channels from nature - related risks to central banking and supervisory activities. for its part, the monetary authority of singapore has published environmental risk management guidelines for banks, asset managers, and insurers operating in singapore. the guidelines set out the expectation that financial institutions should manage environmental risks such as those arising from biodiversity loss. finance can be a powerful force for helping to bend the curve of nature degradation. we need financing for more sustainable supply chains, less disruptive infrastructure, and better farming practices that preserve yield while minimising land degradation. 2 / 4 bis - central bankers'speeches the nature conservancy estimates that the nature funding gap may be as high as 824 billion us dollars per year. so, what is needed for effective

in the advanced economies have generated positive spillovers to emes, through strengthening export demand and enabling conducive financing conditions. at the same time, it must be recognised that monetary policy latitude in emes is to some extent compromised by large capital flows. empirical studies have found that emes ’ monetary policy responds to movements in us interest rates and exchange rates, besides their own domestic macroeconomic conditions. emes should therefore have the flexibility to use the policy tools at their disposal to protect their domestic economies from risks arising from large capital flows. some questions for an integrated policy framework what are some of the questions that an integrated policy framework should seek to address? the existence of [UNK] policy objectives and multiple sources of disequilibria necessitates the use of a range of policy instruments. these can be grouped under three broad buckets : foreign exchange interventions ( fxis ), macroprudential measures ( mpms ) and capital flow management measures ( cfms ). determining which tool is appropriate has been a matter of careful judgement, depending on policymakers ’ objectives, country circumstances, available policy space, and the nature of the shock. policymakers have typically assigned interest rates as an instrument for price stability, mpms for financial stability, fxis for exchange rate stability, and cfms for directly curbing capital inflows and outflows. however, the reality is more complex as policies interact and have overlapping [UNK]. for instance, mpms working through the credit channel can have a dampening [UNK] on aggregate demand and influence the attainment of monetary policy objectives. some countries use cfms to mitigate capital outflows to stabilise exchange rates, if fxis prove [UNK]. an integrated policy framework needs to provide greater clarity on these interactions. we need a deeper understanding of how these instruments can complement, substitute or conflict with one another. for example, we need to better understand the interactions between monetary policy and macroprudential regulation in achieving both price and financial stability. one view is that monetary and macroprudential policies are largely complementary and hence should be used together for better results. for instance, an imf study found that tighter mpms to address financial stability risks are associated with more countercyclical monetary policy responses to macroeconomic shocks. an alternative perspective is that monetary policy can be used to achieve both price and financial stability. by setting the price of leverage and influencing risk taking, monetary policy can lean against the build - up of excessive credit