Ultimately, this exercise would provide valuable insights on how to 3/5  BIS central bankers' speeches  best integrate climate-related risks into the Bank’s macroeconomic and financial surveillance activities and feed into wider policy responses to climate change. Third, we will need to address the appropriate treatment of climate risks within the prudential and supervisory frameworks for financial institutions. As a start, the Bank will require financial institutions to report their exposures to climate risks once work on the green taxonomy has been finalised. Information gathered through this process will be used by the Bank to consider changes to prudential standards to better reflect risks from climate-related exposures. Concurrently, the Bank also intends to align, where relevant, the reporting requirements for climate-related risks with the Value-Based Impact Assessment Framework (VBIAF), which will be finalised by October this year, as well as its corresponding VBIAF Sectoral Guide, which is currently being developed. In addition, the Bank will increase its engagements with individual financial institutions to better understand how they consider climate risks in their risk management approaches and practices. Fourth, we need to strengthen the use of disclosures more broadly, to provide greater transparency on how climate risk considerations are integrated into business decisions. Such disclosures, by both financial institutions and non-financial firms, will help drive action towards more effective risk mitigation and better adaptation to climate change. To this end, the Bank will work with the industry to implement the recommendations of the FSB Task Force on Climaterelated Financial Disclosures (TCFD) in Malaysia.
The number of people in employment has recently reached an all-time high in the UK as a whole; and it is very close to its all-time high also here in Scotland. And the number of people claiming unemployment benefit is at a 27-year low both in the UK as a whole and, again, up here north of the border. Meanwhile retail price inflation - on the Government's target measure - has averaged 2.5% over the past 10 years. That is exactly in line with the present inflation target which recognises that consistently low inflation is a necessary - though not in itself a sufficient - condition for sustainable growth. And that of course is the universal central banker's mantra! That's the good news. The bad news, of course, is that over the past two years the imbalance within our overall economy which I referred to when I last spoke to you - between the internationally-exposed sectors including much of manufacturing industry, and more recently some parts of the financial services industry, which have been under intense pressure, and the more domestically-oriented sectors, where I don't say things have been easy but where the pressures have been less severe that imbalance has persisted, and indeed it has got worse. The grim fact is that there is nothing that we in the UK can do directly to address the global economic weakness which has been at the heart of our problem.