. closer to home, australia ’ s prudential regulator launched their climate vulnerability assessment last year, with results set to be revealed later this year. when we began incorporating climate risks into our stress testing last year, we used a scenario considering the impacts of drought in the north island for large banks. we also conducted our first insurance stress test. it included a scenario with more severe and frequent weather events to gauge risks to insurers ’ capital. this year, our approach entailed undertaking a series of sensitivities examining risks that climate change posed to large bank ’ s systemically important loan exposures : residential mortgages and agriculture. banks are currently working on both components : an assessment of residential mortgage exposures to coastal and non - coastal flooding ; and an assessment of the agricultural sector ’ s exposure to emissions pricing and drought risk. this year ’ s exercises will build our own and industry capability and inform our climate scenario stress test next year. they will help firms meet the requirements of mandatory climate - related risk disclosure, and allow us to examine physical and transition risks to financial stability. we are working with banks to create a streamlined process as part of the new disclosure regime. currently, our climate stress testing focuses on new zealand ’ s largest banks, but over time we intend to build our support for other players in the financial system as they develop their own climate risk assessment capabilities. alongside industry, we are collectively learning through this stress - testing process. we believe this will help the financial system identify and manage climate - related risks. guidance note on climate change risk management the reserve bank is working on draft text of a guidance note on climate change risk management for our regulated entities. we aim to support regulated entities by helping to _ _ _ _ _ _ _ _ _ _ _ _ for evidence, please see results of the 2021 climate biennial exploratory scenario ( cbes ) | bank of england endorsement unclassified unclassified develop a common understanding of what is needed to identify and manage the risks arising from climate change, and sharing best practice. our planned guidance will be part of this support. the guidance will not impose new regulatory requirements. rather, it will be in line with the self - discipline pillar of our supervisory approach, which emphasises that responsibility for the sound and prudent management of a regulated entity rests with its board and senior management. the purpose of the guidance will be to assist those responsible for running firms to better integrate climate risks into their core risk management

stephen s poloz : summary of the latest monetary policy report opening statement ( via video ) by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, toronto, ontario, 16 april 2014. * * * good morning. tiff and i are pleased to join you today by videoconference. as you know, we are in toronto to attend the funeral this afternoon of canada ’ s former finance minister, jim flaherty. before we discuss the monetary policy report, i ’ d like to say a few words about him. what set jim flaherty apart was that while he was a formidable finance minister, he was first and foremost an ordinary man. you immediately connected to him after just a few minutes, and it was immediately clear that he was there for canada, 100 per cent. that ’ s what he did all day, every day. and to everything that he did, he brought a solid dose of common sense. people found that attractive and helpful, and his gut instincts were usually right. a lot of his legacy is right there for us. i ’ ll miss him tremendously, and canada is the poorer without him. let me turn now to the mpr, which the bank published this morning. before we take your questions, allow me to note its highlights. • inflation in canada remains low. core inflation is expected to stay well below our 2 per cent target this year and it will take close to two years for it to return to the target. total cpi inflation is expected to move closer to the target in the coming quarters due to temporary factors. • let me take a moment to explain this inflation forecast. core inflation is expected to remain below target due to the effects of economic slack and heightened retail competition. we expect these effects to persist until early 2016. • however, total cpi inflation will move up this year, before core, in response to higher consumer energy prices, as well as the lower canadian dollar. • we expect total cpi inflation will remain fairly close to target throughout the projection period. that ’ s because in 2015 and into early 2016, as the upward pressure from energy prices dissipates, the downward pressure from retail competition should gradually fade and excess capacity will be falling. this will cause core inflation to make its way gradually up to 2 per cent, catching up to total cpi inflation from below. • the global economic expansion is expected to strengthen over the next three years as