Mergers and IPSs are thus two alternatives available to savings banks to concentrate their business and restructure. The two options differ in terms of their legal form, but they coincide fully in their objectives and should be equivalent in terms of their results. Let us turn to the second step of the evaluation process. The guiding principle of the design and legal construction of IPSs has been the search for a concentration mechanism analogous to mergers in terms of practical results. In this connection, the IPS has been structured on three basic pillars. The first entails the relinquishing by all participants to the central body of the IPS of the capacity to determine and implement business strategies and internal risk control and management tools, in such a way that this central body becomes the nerve centre of the IPS. The second pillar comprises the mutual liquidity and solvency pacts between the participating savings banks and the pooling of results, to extents that should exceed 40%. And the third pillar is a commitment to stability of the agreements, which must run for a minimum term of 10 years, and which cannot be broken without the Banco de España first analysing the viability of the various institutions resulting from the fragmentation process. It should be stressed that, in all cases, the agreements so far reached go further than these minimum legal requirements, in the extent of pooling of solvency, liquidity and results.
As the data to be collected and metrics that are relevant for each sector can differ greatly, there will be a need to take a sectoral approach to this. For example, an asset manager looking to invest in the agriculture sector will not find raw data such as temperature and rainfall levels, proximity of the farmland to conservation areas, or the education levels of the farm owners meaningful. These must be converted into an accurate assessment of the environmental and credit risks of the agricultural assets so that the asset manager can adjust its investment decisions accordingly. The financial sector has an important role to play in determining these frameworks, to ensure that capital is channelled effectively towards sustainable business practices. MAS is keen to work with the industry, academia and international organisations to develop these sector-specific frameworks, for example, for maritime, agriculture, logistics, and others. As an international financial centre, Singapore is committed to channelling financial flows towards sustainability and transition efforts in Asia and globally. We are developing green finance solutions and markets that can support a sustainable economy. We are strengthening the financial sector’s resilience to environmental risks through providing guidelines on environmental risk management and stepping up disclosure expectations. We are working closely with the private sector to develop a taxonomy prioritising transition activities. We are actively exploring how technology and innovation can be leveraged to drive the financial sector’s sustainability agenda. We must harness technology and data to drive effective climate action.