Building a sustainable financial system: the state of practice and future priorities

Efforts to align the global financial system with climate security and sustainable development are entering a new phase. Five years ago, only a handful of central banks were addressing the significance of the environmental crisis for the delivery of their mandate. Today, a growing number of central banks, along with supervisors across banking, insurance, pensions and securities, are moving from the recognition of their role in building a sustainable financial system to the implementation of a growing range of measures.

This paper charts the rise of central bank and supervisor action on climate change and wider sustainability issues, analyses the key features of the ‘new normal’ and highlights priority themes for policy and research in the years ahead.

Published by Banco De España as part of Issue 37 of its Financial Stability Review.

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