s recent publication of its own ambitious scenario exercise for the french financial system. 3 through both its scenario work in the ngfs, and its internal analysis, the bank has developed a clearer understanding of where climate knowledge gaps persist and what these might mean for our objectives. for example, there is particular value in the deepening of our understanding of the macroeconomic implications of climate change and the pathways to net - zero. it is for governments to set out a pathway to net - zero and the policy levers that will be used to deliver it. but as central banks, we will need to understand any implications of the transition for the economic outlook and our potential policy responses. the ngfs have started to explore this, but more work will be needed as the impacts of climate change and the transition to net - zero start to come into sharper relief. at the bank, the monetary policy committee ( mpc ) recently had its first informal discussion on the macroeconomics of climate change, and climate is an increasingly important part of g7 discussions between central banks and finance ministries. but more work and discussion is needed. specifically, there is particular value in : ( 1 ) further integrating climate and macro modelling ; ( 2 ) understanding and sizing related transmission channels ; ( 3 ) going beyond the aggregate impacts to understand sectoral implications ; and ( 4 ) assessing how the transition might affect the demand and supply sides of the economy. what is increasingly clear is that the effects of climate see a first assessment of financial risks stemming from climate change : the main results of the 2020 climate pilot exercise, acpr, may 2021 all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice change and the transition to a net - zero economy will manifest over time - so analysis needs to span the short, medium and long - term to capture fully these effects. let me now turn to how we are embedding climate risk management in the financial firms that we regulate. we have worked to deepen our understanding of risks to the financial system and build resilience to climate change both at the macro and micro prudential level. at the micro - prudential level, the good progress regulators have made through climate - focused fora such as the ngfs and sustainable insurance forum ( sif ) has catalysed work across international standard setting bodies and other authorities including the basel committee on banking supervision ( bcbs ) and the financial

’ s role and how the committee sees the current conjuncture in terms of risks to financial stability. i will focus on the uk property sector. that is not simply because today ’ s lecture is supported by the investment property forum and the cambridge university land society. property - related debt – for residential and commercial real estate purposes – makes up around 60 % of private nonfinancial sector debt in the uk. and, of course, the counterpart of that is that domestic property - related loans make up around 55 % of the domestic loans of the uk banking sector ; 76 % when financial sector loans are excluded. 1 moreover, the evidence is pretty clear from history, and across non - bank lenders are also an important source of finance, providing 15 % of all property - related loans according to bank staff estimates. bis central bankers ’ speeches countries, that there is a strong and special link between booms in property - related debt and financial crises in a way that is much less true for other assets like equities. 2 i want also to reflect a little today on the health of banks in the uk. since last summer, and particularly since the turn of the year, investors have written down the value of banks in advanced economies. does this signal concerns about banks ’ resilience and robustness? or about their returns? the financial policy committee the fpc is charged with identifying risks and taking action to protect the resilience of the uk financial system. in essence this means two things. first, we need to be confident that the regulatory framework in the uk addresses the risks not just of individual financial firms, important though that is, but also the risks inherent in the financial system as a whole. on that front we are well advanced in implementing in the uk a programme of reforms to regulation that is unprecedented in scope and effect. to give some examples of reforms and progress : capital requirements for globally systemic banks have increased ten - fold ; and since the crisis, major uk banks ’ leverage has roughly halved ; they have cut the share of total funding accounted for by short - term wholesale funding from nearly 30 % in 2007 to 10 % ; reduced trading assets by a third and cut inter - bank exposures by two thirds. second, we need to address, through time, the risks that build up in the financial cycle. financial cycles – the build - up of credit and risk driven largely by the dynamics of the financial system and its interaction with the economy – are generally longer than