Pablo Hernández de Cos: The role of central banks and banking supervisors in climate action

Opening remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the resilience of the financial system to natural disasters, IESE online conference, 17 March 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and Gentlemen,

Let me first thank Professor Xavier Vives for inviting me to this conference on the "Resilience of the financial system to natural disasters", organised by the IESE. It is a pleasure for me to open the conference. I am sure the final version of your forthcoming report will benefit from the views of such distinguished members of academia that are today with us. And I am certain they will provide us with much food for thought, ultimately benefiting the joint efforts to address the risks associated with climate change.

This topic has, in recent years, come to the fore of the concerns of the overall financial sector, including firms, supervisors and central banks. Let me offer some brief remarks on this topic, starting with the impact of climate-related risk on the financial sector and the role of regulators and supervisors, and followed by the connection between climate change and the conduct of monetary policy.

Climate-related risk for the financial sector and the role of regulators and supervisors

Across the studies measuring the impact of the various industries and sectors on climate change, the financial sector is usually classified among the environmentally friendly branches of activity. This is because greenhouse gas emissions stemming from the financial sector are very low and also because the activities it engages in do not significantly affect the environment.