This would effectively tighten financial conditions not only by changing the expected path of short-term interest rates, but also by bringing forward the expected start of balance sheet normalization. To sum up, I see substantial advantages in behaving in as systematic fashion as possible in setting monetary policy. But that should be done in a way that fully accounts for any constraints on policy imposed by the economic environment, the presence of asymmetric risks, and allows us to learn as we go. The fact is that the economy is recovering after an unusually deep recession and a severe financial crisis. We don’t have much experience with this type of episode and how the economy is likely to perform. What we need to focus on is not what interest rate a given rule generates, but what policy setting can be expected to deliver the appropriate return path to the dual mandate objectives – the type of return path that standard Taylor Rule formulations achieved in different economic circumstances in the past. Thank you very much for your kind attention. I would be happy to take a few questions.
Published Date: 08 June 2022  "Towards Net Zero in Asia" - Opening Remarks by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, at the Launch of GFANZ’s Asia Pacific Network Central Oﬀice on 8 June 2022 Friends and colleagues Ladies and gentlemen, good morning. There are four key enablers for the journey to net zero: carbon pricing in some form; emissions standards, across various activities; technological advances, in renewables as well as energy efficiency; green finance This fourth enabler is where the financial sector can play a critical role – both the financial industry and those who regulate it – in getting us to net zero. The starting point for climate action in the financial sector is through the gateway of risk management. Before the financial sector can do good, it must first ensure that it comes to no harm. Hence the importance of ensuring that the financial system is climate resilient – that it can identify and manage the risks associated with both climate change and mitigating actions. Seven years ago, Mark Carney – when he was chairman of the Financial Stability Board, and I had the great pleasure of working with him – socialised the importance of managing climate-related financial risks. The work that Mark initiated through the Task Force on Climate Related Financial Disclosures (“TCFD”) has led to a broad consensus today on the relevance of climate-related risks to financial decisions.