And when analysing the potential existence of gaps to the current framework, we are taken a very comprehensive approach, meaning that we will look in detail to the regulatory, supervisory and disclosure dimensions. I think we all agree that the topic of climate change is all-encompassing when it comes to the potential impact on banks, and therefore requires a holistic approach when considering potential responses. On disclosure, we are conscious that there are a lot of initiatives underway focused on developing a globally consistent approach to sustainability reporting. But across these initiatives, we still need to bridge gaps so as to build a common disclosure foundation. Given the evolving initiatives and uncertainties related to the measurement of climate-related financial risks, we will consider in near term an appropriate Basel Committee response to support these initiatives. The Pillar 3 framework is a powerful instrument when it comes to disclosure. It is designed in a modular way and can therefore can be easily updated and adapted to reflect additional risks. On supervision, both the Basel Core Principles and Pillar 2 framework are flexible to accommodate any additional supervisory responses. The Committee is also exploring sound supervisory practices associated with climate-related financial risks. The target is to prepare a report for discussion with the Committee in Q3 and publish the report by year-end (subject to the Committee’s approval).
BIS Review 126/1999  6  These have not been easy times for banks. As a regulator, I cannot help but underscore the essential role banks play in the global marketplace. By intermediating credit between savers and investors and providing liquidity to the financial sector, banks are the essential link in well-functioning economies. Thus, while capital levels and risk management policies are without question important, they do not take precedence over the responsibilities of bankers to serve their purpose in a Schumpeterian world of creative destruction. This most fundamental of responsibilities involves the use of credit judgment. By this I mean that bankers must not lend to excess when times seem good and then lend too little when times appear more difficult. This is an ongoing obligation of banks and is no less so as we approach the century date change. With roughly six weeks to go before year-end, I believe it critical that banks approach the new year with these thoughts in mind and I call on them to be attentive to providing for their customers’ reasonable needs. By reasonable needs, I have in mind that banks should think twice about huge demands based on what seems to be customers’ excessive concern about Y2K, but grant appropriate credit for realistic needs, even if this involves somewhat greater use of their own balance sheets than would usually be the case.