of climate change, again the ngfs has the ability to use its convening power and analytical excellence to contribute to a 1 / 3 bis - central bankers'speeches common understanding. the ipcc is the authority on analysing future climate developments. but our members can help translate the ipcc's scientific insights into financial and economic consequences. many of our members are well - trusted economic advisors to their governments. let us use this role and let us leave no doubt that climate change needs urgent action. of course, this is not only true for governments and policymakers. we, as central banks, are also directly affected by climate change. we discussed how we have to adjust our models to capture these climate - related impacts better. but we did not only take the outside - in perspective, we also looked in the mirror and asked how our action and policies affect the climate and the transition. for example, what are the effects of tighter monetary policy on climate investments in industrialized economies and what does that mean for emdes? 4 nature - related risks our next frontier will be nature - related risks. as the dasgupta report stated, naturerelated risks and biodiversity loss, in particular, could give rise to existential risks for humanity. nature - related risks include climate risks, of course, but they go far beyond. hence, the ngfs has to widen its horizon as well and go far beyond climate. and it is impressive how much progress the ngfs has already made. at the same time, it was humbling to realize just how much more complex the issue is. at first, there were no obvious answers to seemingly simple questions such as : where do we even start? what do we want to measure? which metrics could we use? our task force has made great strides in building a common language and understanding for supervisors, central banks and the financial sector as a whole to use. but as always, laying the groundwork is only the first step. when discussing the work program last year and launching our task forces, we explicitly wanted them to make themselves obsolete over time by gradually integrating their work into our workstreams. hence, dealing with nature - related risks has to become an integral part of our work on supervision, on scenarios, on disclosure for central banks, etc. only then can we make sure that such risks are adequately measured and managed. 5 transition plans looking ahead, dealing with nature - related risks may also involve transition plans – but we are not

, we must also pay attention to the cumulative effects of, and the interplay between, individual regulatory initiatives. where there is a lack of consistency there is a danger that different measures may create conflicting incentives or may even cause countervailing effects. this then may diminish, or even completely prevent, the desired effects of new rules. take, for example, the interplay between the capital requirements directive / capital requirements regulation, which serve to implement the basel iii rules in europe, and solvency ii : the former seeks, among other things, to place bank funding on a more stable, long - term basis. however, solvency ii may, under certain circumstances, benefit short - dated bonds, impacting insurers ’ asset allocation and thus banks ’ funding costs. 4. implementing basel iii ensuring consistency clearly calls for intensive cross - border cooperation. this holds especially true as the reform process is shifting from policy development to implementation. countries must live up to their commitments and ensure the timely and globally consistent implementation of agreed policies. this applies, above all, to basel iii, which is without doubt the central achievement of our reform efforts. although it has become apparent that some countries are having difficulties sticking to the timetable, i urge all authorities involved to implement the framework as internationally agreed. recently, there has been a somewhat disconcerting discussion about the perceived shortcomings of basel iii. some argue that it is not enough. others argue that it is too complex. yet, neither of these criticisms is convincing. first, one clear lesson from the crisis is that banks ’ risk absorbing capacity was way too low. therefore, basel iii substantially raises capital requirements, reducing the probability of bank failures and the associated risks to financial stability and to taxpayers. second, while risk measurement will never be perfect, simplicity can sometimes come at a cost, too. operating exclusively on a simple non - risk - based ratio may counteract one of the basel framework ’ s overarching principles : more risk - taking means higher capital requirements. having said this, i fully agree to the leverage ratio ’ s overall intention which is to deliver a simple, transparent and credible ratio, complementing the risk - based capital requirements – and not replacing them. it should just serve as a backstop. there is no alternative to implementing basel iii on a global scale. in particular, i call on my colleagues in the us not to unexpectedly question the whole framework in the 11th hour – after taking part in its negotiation during the entire