Even in the absence of any firm that may individually seem too big or too interconnected to be allowed to fail, the financial system can be vulnerable to contagion.
By setting a good example, central banks can advocate transparency on climate risks in financial markets. This is, for instance, why De Nederlandsche Bank added a climate annex to its annual report this year, fully in line with the recommendations of the Task Force on Climate-Related Financial Disclosures, the TCFD.