In Figure 6, we can also see that the sum of squares for the output-gap forecast is much smaller than for the inflation-gap forecast. A higher repo rate path should have been able to push down both the inflation forecast and the forecast for resource utilisation. This would have reduced the sum of squares for the inflation-gap forecast but not increased the sum of squares for the output-gap forecast by very much. This would move the point for February 2008 in Figure 6 to the left and somewhat upwards. Unless the iso-loss line for the forecast loss function is very flat, that is unless the weight given to the stabilisation of resource utilisation is very high, this should give rise to a lower loss and thus to a more well-balanced monetary policy. The main scenario in February 2008 would thus be an example of a monetary policy that was not well balanced. However, in February 2008 the Riksbank  8  This can be done using the methods developed in Adolfson, Malin, Stefan Laséen, Jesper Lindé and Lars E.O. Svensson (2008), "Optimal Monetary Policy in an Operational Medium-Sized DSGE Model", www.larseosvensson.net. BIS Review 29/2009  9  attached more importance to the CPIX forecast than to the CPI forecast. The CPIX forecast gives rise to much smaller deviations from the target than the CPI forecast; see Figure 7. With regard to the CPIX forecast, monetary policy in February 2008 was better balanced.
These include factors like: an appropriate institutional, legal and policy framework, and regulatory clarity; a robust climate information architecture for investment and performance risk assessment, comprising reliable and comparable climate data, internationally interoperable taxonomies, and climate disclosures; and some form of common finance reporting standards that can be used to measure, monitor, verify, and assess impact. Third, identify demonstrative projects that showcase good mechanisms available to scale blended finance. Our scan of such projects has surfaced some preliminary observations on the key mechanisms to scale blended finance; standardised documentation to streamline due diligence and project preparation processes and to lower origination costs; effective currency hedging solutions to address local currency risks; pooling of investors at the fund or facility level and taking a portfolio rather than individual project approach; and leveraging on the significant catalytic effect of grants in the upstream project preparation phase. We will study these observations further and present them in detail in the Handbook. We must take an ecosystem approach to resolve the climate crisis. Getting to netzero requires the real economy and the financial sector to move in lockstep. This requires applying the collective knowledge and resources of governments, central banks, and financial regulators and financial institutions, corporates and individuals. In a small way, this third edition of the Green Swan Conference contributes to this collective effort. Let us harness our strengths and coordinate our action across the ecosystem. Thank you, and I wish you all a fruitful conference. 5/5  BIS - Central bankers' speeches