This is because it will not only explicitly ask large banks to disclose their transition plans, it will also ask banks’ corporate clients to do the same. This last point is crucial, as it will enable banks to assess the climate-related and environmental risks in their asset portfolios.
Where does that leave policy makers? There is still a lot we do not know. It seems capital flow measures can help a country to deal with volatile capital flows and reduce the likelihood of a financial crisis. But of course one has to consider the costs and distortions. I think the Institutional View of the IMF has got it mostly right.