climate risks, financial markets and central banks ’ risk management speech at the green swan 2021 global virtual conference 02. 06. 2021 | virtual | jens weidmann 1 introduction 2 greening the ﬁnancial system - the role of the bis 3 managing climate - related ﬁnancial risks and enhancing transparency 4 what central banks can and should do 5 conclusion 1 introduction ladies and gentlemen, it ’ s a great pleasure for me to speak at the “ green swan 2021 ” global virtual conference. tackling the climate crisis is one of the greatest challenges of our time and requires changes throughout the economy. its urgency increases with every minute that passes. the economist john kenneth galbraith wrote : “ in economics, unlike ﬁction and the theater, there is no harm in a premature disclosure of the plot : it is to see the changes just mentioned and others as an interlocked whole. ” since i am an economist, too, and neither a novelist nor a dramatist, there is no reason not to disclose the plot of my speech, all the more so as disclosure plays an important role in it. first, i would like to give you, in my capacity as bis chairman of the board of directors, a brief overview of the bis ’ s activities in this ﬁeld. [ 2 ] then i will explain why transparency matters when it comes to greening the ﬁnancial system and managing climate change - related risks. and ﬁnally, i will elaborate on what a central bank, and speciﬁcally the eurosystem, should do to protect its balance sheet from climate - related ﬁnancial risks. 2 greening the financial system - the role of the bis as regards the greening of the ﬁnancial system and the support of central banks in addressing climate - related risks, the bis has done pioneering work. its climate change and green ﬁnance - related activities span a variety of business areas. its analytical work comprises conceptual considerations regarding the role of central banks as well as policy - oriented research output or statistics - related efforts. the latter means, for example, detecting and closing data gaps in the ﬁeld of sustainable ﬁnance – an important task, which is carried out by the bis ’ s irving fisher committee. bis economists are also increasingly active in research on climate - related issues. just one of a number of valuable contributions is “ the green swan ”, a joint publication with banque de france. [ 3 ] last year, it attracted a great deal of

andreas dombret : deutsche bundesbank ’ s 2013 financial stability review opening statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the press conference of the deutsche bundesbank ’ s 2013 financial stability review, frankfurt am main, 14 november 2013. * * * an overview of risks i am pleased once again to present, together with ms lautenschlager, this year ’ s edition of our financial stability review. compared with previous reviews, this year ’ s is brought out in a somewhat calmer environment. the tension on the international financial markets has eased. this is beneficial to financial stability in germany, in line with the degree of calm prevailing internationally after a period of turbulence. the situation is also reflected in the stress indicator for the german financial system. the indicator is well down from the levels it reached after lehman and at the height of the european sovereign debt crisis. however, two major risk factors remain. • first, the low - interest - rate environment. this is placing a growing strain on the german financial system. on the international financial markets, there is an increasing risk that the search for yield will result in excessive behaviour and will give further impetus to the shadow banking system. german banks face greater pressure on profitability. for life insurers, low interest rates are increasingly eating away at their financial buffers. • second, the european debt crisis is not yet over. the risk of contagion remains high. it is a matter for concern for us that the ties between governments and domestic banks have tightened again in several countries. i would now like to discuss each of these issues in greater detail. low - interest - rate environment affecting the financial system when considering the low - interest - rate environment, people may be tempted to say : one man ’ s joy is another man ’ s sorrow. it is good for house builders and buyers and for shareholders. for savers and endowments, it is not so good. your personal view of the lowinterest - rate environment may therefore depend on which group you fall into. you can decide for yourself whether low interest rates are a boon or an annoyance. but we are not talking here about personal finance. we are concerned with the longer - term dangers to financial stability, and they affect everyone. low interest rates have without doubt helped to stabilise the situation. but now the time must actually be used. by governments to consolidate their finances and to strengthen competitiveness