For example, we cannot argue that the current pandemic was unforeseen, but still we were not prepared to prevent it or even to mitigate its costs. Climate change is a highly complex, infrequent but material risk that affects all countries and sectors. We need to develop more detailed plans and a deeper understanding of its impact to the economy and the financial system.
This is not hypothetical; physical and transition risks are already occurring and are part of the financial authorities’ agenda. We 1need to upgrade our economies resilience and prepare the financial system to manage these risks.