It is crucial to ensure that the models that drive CCPs margin requirements are robust, conservative and do not act pro-cyclically. This is an area that, as a supervisor, we look at closely. The second is to develop further the arrangements for the recovery and, if necessary, resolution of CCPs. I will cover this in the next section. 17  EMIR RTS Article 45.2 requires CCPs to secure not less than 95% of cash collateral with highly liquid financial instruments, thereby limiting the amount of cash CCPs can hold unsecured. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  And the third, and perhaps most important, is to develop within CCPs the culture of the ‘systemic risk manager’ - responsible not just for managing the risks to the firm but also managing the risks to the system more broadly. CCP management, with encouragement from supervisors and regulators, have made significant progress in strengthening their governance and risk culture. But as the reforms are implemented, as greater use is made of CCPs, as they become more important as a systemic shock absorber, CCP’s management and boards will need to continue to up their game. And we will continue to hold them to account in doing so. Regulators and Supervisors  Regulators and supervisors will need to up their game also as the importance of this infrastructure grows. As I noted at the outset, the international standards – the CPMI-IOSCO Principles for Financial Market Infrastructure - were developed by central banks and regulators in 2012.
[8] Since climate change is partially irreversible, such delays could prove detrimental. [9] In fact, the preliminary results of the ECB’s ongoing economy-wide climate stress test illustrate that the magnitude of long-term physical climate change risks by far exceeds the short-term transition costs associated with more stringent mitigation policies, as described by Vice President de Guindos in a recent blog post. [10] Other research corroborates the finding that an early and orderly transition is likely to reduce the extent of economic disruption associated with climate change. [11] Central banks can act as a catalyst to facilitate an orderly transition towards a greener economy. [12] Although central banks’ leeway to address climate risks within the remit of their mandate is still subject to debate[13], there are an increasing number of commentators who argue that central banks should take the implications of climate change into account. [14] First, central banks should ensure that climate risks are adequately incorporated both in their own risk management and in that of the financial institutions they supervise. Second, central banks can have an important role in fostering climate-related information disclosure by firms and financial institutions. [15] Finally, central banks have an array of potential instruments at their disposal to incentivise the issuance of green financial products. [16] However, we need to proceed with caution: as a European institution with statutory independence, the ECB is strictly bound by the provisions of the Union’s legal framework.