- founded by the hkma and the sfc. 1 / 4 bis - central bankers'speeches first, on standards. a common set of green standards, to the extent possible, is important to enhance the transparency, comparability and efficiency of climate finance. hong kong is a front runner in setting regulatory requirements for the financial sector. we are the first asian jurisdiction mandating climate - related disclosure across the financial sector by 2025, in line with the global framework set by the task force on climate - related financial disclosures. we also made an early commitment to adopting new standards promulgated by the international sustainability standards board. hong kong adopts the common ground taxonomy jointly developed by china and the eu. we are now exploring the development of a green classification framework on the basis of the china - eu taxonomy, in order to provide the necessary disclosure and guidance to inform capital allocation and encourage market discipline. the hkma has set clear rules – for example by formulating clear supervisory requirements and integrating climate - risk into the supervisor - driven stress - testing framework. the various regulatory requirements help build climate resilience into our banking and financial sector. in the process, financial intermediaries such as banks also act as facilitators to help the real sector adapt and transition, in line with global consensus and commitment to achieving carbon neutrality. second, on data. currently, there is a lack of accessible, standardised data and analytics support in the market. it presents a challenge, not just for climate risk management but for other purposes such as portfolio assessment and business development. we are working with other regulators and the private sector to address these issues, by improving data accessibility and developing a data repository and analytics capability for the industry. we are making good progress. one recent example is the collaboration with the carbon disclosure project, a leading international environmental disclosure platform, to launch a climate risk assessment project that assists corporates especially smes in reporting company - level, climate - related data to help financial institutions assess risk and make credit decisions. let me now turn to the third critical element, which is talent. and this is also our key focus area. we are undertaking multiple tasks here. number one is training. we began by collating and sharing information about highquality training courses and qualifications through a centralised platform run by the centre for green and sustainable finance. number two is incentives. through a government - funded green finance training scheme, we provide subsidies to help market practitioners, students and graduates obtain

4. all these complications are making life difficult for policy makers in the region. while asia, having learned well the lessons from the asian financial crisis, has managed to get through the recent global crisis relatively unscathed, we are now entering uncharted waters, and there are both imminent and longer - term policy challenges. 5. first and foremost, it is challenging to manage the large capital flows. the divergence in the growth rates of advanced and emerging economies have been driving fund flows to asia, resulting in signs of overheating in certain pockets of the region. the increasingly negative real interest rates as a result of rising inflation in many regional economies will add fuel to the already high credit growth and heated asset markets. that said, we must also be wary of the risk of reversal of the fund flow. the recent surge in headline inflation and the more favourable near - term cyclical conditions in advanced economies have already brought forward expectations of the start of rising interest rate cycles. with the normalisation of monetary policy stances in the advanced economies becoming more imminent, the risk of an abrupt reversal of international capital flows is increasing. this calls for pre - emptive policy actions to contain the build - up of overheating pressure and another boom - bust cycle in the region before such abrupt reversals of capital flows occur. bis central bankers ’ speeches 6. secondly, some of the conventional wisdoms in monetary policy may be challenged by paradigm shifts in the next phase of growth. conventionally it has been suggested that central bank normally may not need to react proactively to commodity price inflation because of their transitory nature and limited pass - through to core inflation. however, the recent increase of commodities prices such as food and oil could be more sustainable because of structural change in demand and supply. for instance, structural factors such as slowing of crop yield growth, fast population growth and higher income elasticity for food in developing countries would continue to support higher food prices. policy markers would therefore need to pay attention to these developments in calibrating the appropriate degree of monetary tightening. 7. thirdly, there is also a need to diversify the sources of growth for the region, in order to generate sustainable growth and redress global imbalance. in this regard, it is worthnoting some encouraging developments that are underway in the region. the first one is the deepening intraregional trade and increasing orientation towards domestic consumption. the robust economic growth of the regional economies over the past year has mainly