of financial markets. globally active banks manage their positions on an integrated basis around the world, and pressures originating in one market are quickly transmitted elsewhere. central banks should consider how to adapt their facilities to help these institutions mobilize their global liquidity in stressed market conditions and apply it to where it is most needed. that approach will require the consideration of arrangements with sound institutions in which central banks would accept foreign collateral denominated in foreign currencies. those arrangements are under active study and a number of issues need to be resolved. it is possible that over time, major central banks could perhaps agree to accept a common pool of very safe collateral, facilitating the liquidity management of global banks. the stipulation that the institutions be sound is important : decisions about lending to troubled banks should be made by home country authorities with knowledge and responsibility. another instrument of liquidity provision that central banks are examining is currency swaps to facilitate granting liquidity in other currencies. the central banks found currency swaps useful because the impediments to intermediation in money markets naturally extended to transactions across currencies as well as across maturities and counterparties. supplying credit in dollars to banks in the euro area and switzerland helped relieve pressure on those banks and in our markets. in recent months, the fed was able to make currency swap arrangements on short notice but our reaction time could be even shorter if we keep such arrangements in place or on standby. thinking carefully about which circumstances in the future would warrant the activation of such arrangements will be a useful form of contingency planning. for the united states, of course, perhaps the most difficult and important question involves access to central bank credit facilities by u. s. broker - dealers, including the primary dealers. over the past several decades, the growing importance of broker - dealers and the increasing interconnections of these institutions with other parts of the financial marketplace have accompanied the shift to intermediation through securities markets rather than through commercial banks. financial markets in most other countries are dominated by universal banks ; in those circumstances, securities activities are carried out in organizations that have access to the discount window and other aspects of the safety net we associate with commercial banks. as i have emphasized this evening, one of the things we learned over recent months is that broker - dealers, like banks, are subject to destructive runs when markets aren't functioning well, despite the fact that their borrowing in money markets is mostly secured and their assets mostly market

a particular climate sustainability outcome, without linking the bond to specific green expenditures. the first such ‘ sustainability - linked bond ’ was issued by enel, an italian electricity producer, and offered a ‘ step up ’ coupon penalising the issuer if it failed to meet a specific target for the share of renewable energy in its installed capacity. such bonds are not a complete answer to the concern of greenwashing : the degree of challenge in the target remains the choice of the issuer, for example, and the use of funds cannot be traced to specific projects in the same way as use of proceeds bonds. but they do illustrate the type of innovation now underway in capital markets. chart 8 : total green bond issuance chart 9 : corporate green bonds outstanding by nationality of issuer source : climate bonds initiative ( cbi ) data ( including all selflabelled green bonds aligned with cbi ’ s climate bonds taxonomy and with at least 95 % use of proceeds financing or refinancing green / environmental projects ) and bank source : cbi data and bank calculations. calculations. the billion dollar question, of course, is whether the market is yet discriminating in favour of climate - positive investment, and away from the reverse. there are some encouraging signs from recent primary issuance : green bonds issued by european companies in september priced on average nearly 10 basis points inside existing curves, and tighter than other non - green issuance over the same time period ( chart 11 ). that ’ s real money : for example, the average - 15bp new issue premium on vw ’ s recent €2bn green bond issues will save the firm around €3mn a year in interest costs compared to a conventional bond. evidence of a persistent ‘ greenium ’ in secondary market pricing is however more mixed. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice chart 10 : currency composition of bonds by uk chart 11 : new issue premia for non - financial domiciled issuers ( excluding gilts ) european € bonds ( sep 2020 ) source : cbi, bloomberg finance l. p. and bank calculations source : bloomberg finance l. p. and bank calculations governments ’ interest in issuing green bonds is also growing rapidly. the outstanding stock of sovereign green bonds ( sgbs ) currently stands at $ 80bn ( chart 12 ), and recent months have seen inaugural issues from a range of countries including