2  BIS central bankers’ speeches  Net income for the cooperative sector as a whole in 2015 exceeded € million, entailing an increase of close to 15% on 2014. The return on equity was 4.8%, having increased by somewhat more than 0.5 pp in 2015. This improvement in profitability is due to the almost 60% reduction in asset impairment losses over the past year (practically € million), the result of the reduction in NPLs I mentioned earlier. Net interest income held relatively stable, with both revenue and financial costs having fallen, while the efficiency ratio improved by several percentage points. As regards the sector’s solvency, the highest quality capital ratio, namely CET1, for Spanish cooperatives as a whole was 13.7% in December 2015, almost 70 bp up on the related December 2014 level. This gives a level of CET1 almost 1 pp higher than the aggregate for the Spanish banking sector. In conclusion, the cooperative sector in Spain is holding up with figures and ratios in line with those of the rest of the banking sector, and is currently evidencing solvency levels somewhat higher than those of the rest of the sector. Regulatory agenda: recent developments in the Basel III capital framework I would now like to review the reforms outstanding. But I shall first offer you a brief reminder of the key elements of the new regulatory framework we know as Basel III.
The immense financing needed to build a greener world can only be met through a combination of public and private capital. SINGAPORE’S GREEN FINANCE ACTION PLAN  Last year, the Monetary Authority of Singapore (MAS) launched a Green Finance Action Plan— to support a sustainable Singapore and to facilitate Asia’s transition to a sustainable future. As a champion of sustainable development and as an international financial centre in the heart of Asia, Singapore is well-placed to support Asia’s sustainability journey through Green Finance. Our vision is for Singapore to be the leading centre for Green Finance in Asia. The Green Finance Action Plan comprises four key thrusts— strengthen the financial sector’s resilience to environmental risks; develop green financial solutions and markets for a sustainable economy; harness technology to enable trusted and eﬀicient sustainable finance flows; and build knowledge and capabilities in sustainable finance. Let me elaborate on each of these. STRENGTHENING RESILIENCE TO ENVIRONMENTAL RISKS  First, strengthening the financial sector’s resilience to environmental risks. Climate change poses two key risks to financial institutions. First, physical risks arising from climate change – such as floods and rising sea levels damaging assets and properties, resulting in large insurance claims and reduced collateral values for bank loans. Second, transition risks arising from policy changes, technological advances, or shi s in consumer preferences that reduce demand for fossil fuels, thereby devaluing loans and investments with a fossil fuel exposure. These risks are not trivial and could well threaten the stability of the financial system.