, as well as its corresponding vbiaf sectoral guide, which is currently being developed. in addition, the bank will increase its engagements with individual financial institutions to better understand how they consider climate risks in their risk management approaches and practices. fourth, we need to strengthen the use of disclosures more broadly, to provide greater transparency on how climate risk considerations are integrated into business decisions. such disclosures, by both financial institutions and non - financial firms, will help drive action towards more effective risk mitigation and better adaptation to climate change. to this end, the bank will work with the industry to implement the recommendations of the fsb task force on climaterelated financial disclosures ( tcfd ) in malaysia. fifth, the financial industry will need to step forward and facilitate an orderly transition for households, businesses and governments to adapt to the physical and transition risks of climate change. this involves different players in the financial ecosystem – including banks, insurers and takaful operators, venture capital and private equity firms – to ideate and innovate solutions that would help the economy face the imminent climate - related risks. there is an urgent and critical need to develop sustainable financial solutions, including funding and investment structures with appropriate incentives and support mechanisms, to catalyse greater climate resilience for firms and households. building climate resilience is no small feat. there is much work to be done with a window to accomplish this work that is rapidly closing. clear policy at the national level will be critical to enable the financial industry to size up the physical and transition risks, and implement strategies to manage these risks. sector - specific approaches will also need to converge to limit risks of a disorderly transition. this is a shared responsibility that requires us to come together to support joint and coordinated responses to a clear and present threat to growth and financial stability. to this end, i am pleased to announce that the bank and the securities commission malaysia are establishing a joint committee on climate change with industry representation to pursue collaborative actions for building climate resilience in the malaysian financial sector. the key mandates of the joint committee are to : build capacity through the sharing of knowledge, expertise and best practices in assessing and managing climate - related risk ; identify issues, challenges and priorities facing the financial sector in managing the transition towards a low carbon economy ; and facilitate collaboration between stakeholders in advancing coordinated solutions to address arising challenges and issues. beyond resilience as we intensify our efforts to increase climate resili

, domestic demand should continue to be supported by a number of factors, including the accommodative monetary policy stance, ongoing improvements in financing conditions working their way through to the real economy, the progress made in fiscal consolidation and structural reforms, and developments in energy prices. at the same time, although labour markets have stabilised and shown the first signs of improvement, unemployment remains high in the euro area and, overall, unutilised capacity continues to be sizeable. moreover, the annual rate of change of mfi loans to the private sector remained negative in march and the necessary balance sheet adjustments in the public and private sectors continue to weigh on the pace of the economic recovery. the risks surrounding the economic outlook for the euro area continue to be on the downside. geopolitical risks, as well as developments in global financial markets and emerging market economies, may have the potential to affect economic conditions negatively. other downside risks include weaker than expected domestic demand and insufficient implementation of structural reforms in euro area countries, as well as weaker export growth. bis central bankers ’ speeches according to eurostat ’ s flash estimate, euro area annual hicp inflation was 0. 7 % in april 2014, up from 0. 5 % in march. as expected, given the timing of easter, the increase was mainly due to a rise in services prices. on the basis of current information, annual hicp inflation is expected to remain around present low levels over the coming months, before only gradually increasing during 2015 to reach levels closer to 2 % towards the end of 2016. new macroeconomic projections by eurosystem staff will become available in early june. medium to long - term inflation expectations remain firmly anchored in line with price stability. the governing council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term. in this context, the possible repercussions of both geopolitical risks and exchange rate developments will be monitored closely. turning to the monetary analysis, data for march 2014 continue to point to subdued underlying growth in broad money ( m3 ). annual growth in m3 moderated to 1. 1 % in march, from 1. 3 % in february. the growth of the narrow monetary aggregate m1 remained robust but decreased to 5. 6 % in march, after 6. 2 % in february. the increase in the mfi net external asset position, reflecting in part the continued interest of international investors in euro area assets, remains the main factor