They limit borrowing, over the economic cycle, to the level of public investment and place an upper limit on the debt to GDP ratio of 40%. In assessing the fiscal position it is important to look forward and not just backward at the realised deficits over the past cycle. Of course, it is also important to recognise the many uncertainties surrounding the future path of the public finances. Central bankers probably talk too much about fiscal policy. Certainly, there are politicians, especially in Europe, who believe central bankers confuse the deficits which dot the fiscal landscape with all manner of economic evils, rather as Don Quixote confused the windmills which dotted the landscape of La Mancha with the terrible giants sent by some evil force. So I do not want to overstate the case and tilt at windmills, especially in the light of the fact that this month sees the 400th anniversary of the publication of Cervantes’ great novel. But it will clearly be important that the prudent approach to fiscal policy that has served the UK so well in recent years is continued - over the next cycle and beyond. In that way our national saving rate can be maintained or even raised. The market response to inadequate saving is higher real interest rates. Since the UK is a part of an open international capital market, long-term real interest rates in this country reflect the balance between investment and saving, including the stance of fiscal policy, not just at home but throughout the world economy.
Climate risk is a real threat: financial institutions should have the conviction to want to understand the environmental risks in their portfolios and to mitigate these risks. It is imperative that financial institutions step up efforts to collect the data that are necessary to mitigate their physical and transition risks as soon as possible. Second, financial institutions need greater clarity on the ESG data they need. The Network for Greening the Financial System (NGFS) has recently published a progress report on bridging data gaps. MAS agrees with the recommended approach, which is to first identify the stakeholders and 2/3  BIS central bankers' speeches  use cases, and then define the metrics and data requirements. In the absence of a use case driven approach, technology will remain a solution looking for a problem to solve. In Singapore, MAS is working with our financial institutions, solutions and data partners to pilot some use cases so that we can collectively learn, adapt, and grow in our ability to define the right metrics for ESG measurement. MAS has launched, together with the industry, Project Greenprint – a technology platform to support the green finance ecosystem. The project will identify use cases where technology can help to mobilise capital for green projects, monitor commitments to emissions reductions, and quantify the impact of abatement efforts. We look forward to collaborating with more international financial institutions and solution providers in this effort. Third, we need to develop methodologies to translate raw data into quantifiable assessments of climate-related risks.