of the commissions on tax revenue, pensions and public expenditure, established by the monetary council to develop efficient revenue and expenditure systems throughout the eccu. in addition, the bank, with the support of the caribbean regional technical assistance centre ( cartac ) and the international monetary fund ( imf ), hosted a mini boot camp for technical officers from member governments to facilitate the development of fiscal targets and systems for reporting and monitoring the targets. the ability of eccu member governments to assess, manage and service debt is critical to financial stability in the region and to achieving and sustaining their public sector debt target of 60. 0 per cent of gdp by 2020. throughout the year, the debt management advisory services unit ( dmas ) at the eccb continued to work closely with the debt management units in the member countries to build their debt management capabilities and to address the deficiencies in their debt management strategies. the bank facilitated the establishment of a task force on debt, growth and development to examine the prospects for economic growth in the eccu and to recommend a path for stimulating and sustaining growth in the current high debt situation. the task force is a collaborative effort involving the eccb, the eccu member governments, the oecs secretariat, the caribbean development bank, the world bank, the imf and the international financial corporation ( ifc ). the bank continued to play a critical role in implementing the various elements of the eccu eight point stabilization and growth programme. as the eccu prepares for the transformation phase of the restructuring of its economies, starting in 2013, the eccu eight point stabilisation and growth programme must be consolidated into a strategic action plan with clearly defined and measurable goals. this programme, together with the arrangements under the oecs economic union, provides the framework and guidelines for creating the necessary fiscal space and scope, reducing risk, effectively assessing and mitigating challenges and building resilience to external shocks in order to facilitate sustainable development. the way forward the year 2012 will be critical as the eccu strives to consolidate its efforts to strengthen its economies and position itself to take advantage of the opportunities from the anticipated global economic recovery. the policy priorities for the bank would therefore be to : strengthen the framework for the early identification of risk and resolution of problems at weak financial institutions ; continue to explore appropriate monetary policy tools and the enhancement of market intelligence to influence money and credit conditions and to inform policy development ; bis central bankers ’ speeches continue to work with member governments to identify and remove

, interest rates and asset prices, while altering the underlying structure of our economies. it is therefore essential for central banks to gain a full understanding of these repercussions for the functioning of the economy and the financial system. we need to embed climate - related developments and risks in our analyses and update our analytical and forecasting toolkits accordingly. regarding the impact on the financial system and the economy, climate change entails both physical and transition risks. first, physical risks result from persistent changes in climate and more frequent extreme weather events. goethe himself experienced first - hand the enormous impact extreme weather can have. in his day, this was caused by a volcanic eruption far away on an indonesian island. the year 1816 went down in history as the “ year without a summer ”. people suffered from the cold and from persistent rain ; crops failed and famine broke out. second, transition risks relate to the process of adjustment towards a lower - carbon 1 / 3 bis central bankers'speeches economy. both the physical impact of climate change and the transition to a less carbon - intensive economy can be a source of financial risk. for example, the ecb found in a sample of euro area banks that the exposures to the twenty largest emitters of carbon account for 20 % of total large exposures. clearly, it is in every market participant ’ s interest to properly protect themselves against climaterelated financial risks by adjusting their risk management accordingly. thus, first and foremost, it ’ s up to the financial sector to recognise and take into account such risks. whether and how this is done has a bearing on several of our tasks as a central bank. in banking supervision, we do not regard climate - related financial risks as a new risk category, but as a driver of classic categories such as credit risk and market risk. we already expect banks to incorporate such risks into their risk management framework appropriately and to back them with adequate capital. however, climate - related risks have certain characteristics that hamper their inclusion in ratings and internal risk models. first, historical data do not capture them adequately. second, physical risks are potentially non - linear and expected to primarily materialise in the medium to long term. and third, the future pathway of climate change and climate action is highly uncertain, not least because it heavily depends on political decisions. in this context, scenario analysis is a particularly useful tool. furthermore, it is important that banks take a forward - looking approach and consider a longer than usual time horizon. the