This will lower friction costs in the banking sector, create more efficient financial intermediation, and help curb shadow banking given the rise of strong alternatives offered by fintech and digital innovations. Moreover, the shift helps support the price discovery process and establishment of more accurate interest rate benchmarks. We are also deliberate in the timing of the reduction of reserve requirements.
And now we have to enshrine it in law, work out the details and get it implemented. Apart from carbon pricing and having a plan in place, what else do we need to do to get the money flowing to where it’s green? Well, thirdly, banks, insurance companies and pension funds need to be more aware of the climate risks they face.