But the political scene on climate has already been changing dramatically and it will continue to change - hopefully for the better. ** Looking back at how far we have come in developing green finance over the last six years, one may wonder: “Is it useful?” – certainly yes; “Is it enough?” –certainly not. Let me remind everyone of one simple – and dreadful number: according to the IPCC, we have less than six years of greenhouse gases budget left if we want to have 83% chance to stay below 1.5°C. Let’s not fool ourselves: we have been making very significant progress to make sure that the financial system is fit to the challenge of the transition. But there is still much work to do on our side, starting with mandatory and harmonised disclosures, and a close monitoring of transition paths. Still more fundamentally, what we are doing only makes sense if this is part of a wider collective endeavour. Finance, and still more Central banks, cannot be the only green game in town. A few days ahead of Glasgow, it is the right time to listen to the Pink Floyd again and the Dark Side of the Moon: “And then one day you find ten years have got behind you; no one told you when to run, you missed the starting gun”4. It is not too late yet, but let us hear the starting guns. I thank you for your attention.
Already some host supervisors have found that local managers may be unfamiliar with the parent organisation’s plans for Basel II: this understandably tends to make host supervisors less confident about the quality of an organisation’s planning and its readiness to move to Basel II. Moreover, it increases their need to ask more questions, some of which may duplicate the questions that the home supervisor or other host supervisors are asking. If a bank has already developed sufficiently detailed and transparent plans for its application of Basel II, a substantial portion of the hard work has already been done. Sharing those plans with home and host supervisors, and with managers throughout the bank’s operations and locations, should not require too much more effort. Instead, the bank should be in an even better position to focus on running its business confidently while still implementing its plans carefully for the future. Validation One of the greatest challenges – for both banks and supervisors – of the Basel II framework is the need to validate the systems and processes used to generate the parameters that serve as inputs into the IRB approach to credit risk. Although validation is foremost the responsibility of banks, supervisors must have a thorough understanding of validation in order to ensure overall integrity of bank’s activities in this area. In recognition of the importance of validation the Committee recently published six principles on validation that will guide our future work.