For central banks or prudential authorities, three questions arise: that of financing –and interaction with monetary policy–, that of information – and of disclosure–, and lastly that of time horizons –and stress tests–. 1. The question of financing: what interaction with monetary policy? Climate change is likely to affect the price of goods and services. It has a direct impact on food prices. But it will also more generally affect growth and the allocation of resources. Against this backdrop, central banks should remain vigilant about, and possibly monitor the economic consequences of climate change. And monetary policy will have to play its role of contributing to a smoother rebalancing of price structures, in line with its price stability mandate. Article 2 of the European System of Central Banks statute states: “Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community, with a view to contributing to the achievement of the objectives of the Community [economic activities, sustainable and non-inflationary growth respecting the environment…the raising of the standard of living and quality of life]. Some would like to go a step further, using the quantitative easing tool to help finance the energy transition, purchasing “green” assets, granting favourable treatment to green assets that are eligible as collateral, or setting up dedicated long-term facilities; the list of possibilities is long. However, we must bear in mind the ultimate aim of monetary policy. It is designed to achieve macroeconomic objectives, not sector-specific goals.
This is precisely one of the objectives of the Institute of Bankers, and with its newly launched Representative Office in Beijing, the Institute will extend its existing good work to the Mainland. It will help promote the training of bank employees on the Mainland, thereby contributing to the effective financial intermediation and smooth functioning of this crucial part of modern economy. The economies of the Mainland and Hong Kong are now highly interdependent. The Institute’s Beijing Representative Office will not only serve to enhance professionalism of the Mainland’s banking sector as a whole, but also contribute to the financial stability and development of both the Mainland and Hong Kong. Let me end this address by wishing the Institute’s Beijing Representative Office every success in its future endeavours. BIS Review 45/2005  1