It is constantly developing its skills to understand and assess the impact of relevant risks – including those linked to climate change – on the economy and the stability of the financial system. It also integrates these considerations into its balance sheet risk management in order to guarantee the value of its reserves over the long term. Here, the SNB applies ESG criteria to its asset portfolio, while respecting the requirements of monetary policy. Given the rapid  13  IMF Global Financial Stability Report (2019), October. Cf. also Krüger, P., Z. Sautner and L.T. Starks (2019), ‘The importance of climate risks for institutional investors’, Finance Working Paper No. 610/219, September. Page 11/12  pace of developments in environmental economics, the SNB is closely monitoring developments at both national and international level. Ladies and gentlemen, it is now my pleasure to invite you to a round table. This will give us a chance to broaden the debate beyond central banking and to hear what other players have to say about the impact of climate risks on the economy and the financial system. Page 12/12  Climate risks and central banks: an SNB perspective Andréa M. Maechler, Member of the Governing Board Thomas Moser, Alternate Member of the Governing Board Swiss National Bank Money Market Event Geneva, 14 November 2019  Sources: SNB, Baker, Bloom and Davis.
Notably, some studies have shown that the ratio of Asian exports for final consumption within Asia has risen, though varying among individual countries. For example, approximately 70 percent of Indonesian exports to China are for final consumption in China. Such ratios for Singapore and Korea are 50 and 40 percent, respectively. That said, it is wise not to jump quickly to conclusion because Asian economies and trade remain critically linked to the G3 economies. While this negative spillover from advanced economies to Asian economies could be partially cushioned on the trade side, I have greater concern on the potential spillover through volatility in international capital flow and financial market movements. In addition to the risk aversion in time of market stress, emerging market economies have tried to live with spillover from exceptionally easy monetary policy in advanced countries. Such practices have created excess global liquidity leading to volatile capital flows into emerging market countries  BIS central bankers’ speeches  1  including Thailand. Moreover, excess global liquidity has been an important factor behind the rapid rise in oil and other commodity prices. Unless the advanced economies manage to get themselves out of sluggish growth path, all of us have to be vigilant and cannot rule out the possibility that the US may need to find creative policy actions to stimulate its economy.