The Bank for International Settlements (BIS) and certain international entities published a report that examines the efforts on taking forward the work on central bank digital currencies. BIS, in conjunction with certain international organizations, also launched the Climate Training Alliance to establish an online portal for global training on climate risks for central banks and supervisors; the international organizations that jointly launched this Alliance are the International Association of Insurance Supervisors (IAIS), the Central Banks and Supervisors Network for Greening the Financial System (NGFS), and the UN-convened Sustainable Insurance Forum (SIF). These organizations intend to collaborate to improve the skillset of the central bank and supervisory community on managing physical and transition risks from climate change. The authorities will use the FSI Connect platform led by the Financial Stability Institute (FSI) of BIS.
The Climate Training Alliance brings together authorities at the forefront of climate risk management to share best practices for integrating these risks into their activities, including banking and insurance supervision, scenario analysis, monetary policy, and portfolio management. The Climate Training Alliance will bring together FSI Connect tutorials based on handbooks, guidance, and standards from international organizations as well as access to the training provided by financial authorities, starting with the Bank of England (BoE), the Central Bank of France (BDF), the Central Bank of the Netherlands (DNB), the European Central Bank (ECB), and the Monetary Authority of Singapore (MAS). The suite of handbooks and international standards by Basel Committee on Banking Supervision (BCBS), IAIS, NGFS, and SIF on climate risk management will be developed into training materials to provide more practical support for the authorities implementing these approaches. This will be coupled with access to peer-to-peer training resources, including offering region-specific and cutting-edge training.
In addition, the BIS Innovation Hub, the Committee on Payments and Market Infrastructures (CPMI), the International Monetary Fund (IMF), and the World Bank have released a joint report on facilitation of cross-border payments by the central bank digital currencies and on the practical efforts that are taking these considerations forward. To date, no major jurisdiction has launched a central bank digital currency and many design and policy decisions are still unresolved. Also, most investigations on central bank digital currencies by central banks focus on domestic issues. In this context, this report is exploratory and examines cross-border implications with the assumption that central bank digital currencies will become widely used. Facilitating international payments with central bank digital currencies can be achieved through different degrees of integration and cooperation, ranging from basic compatibility with common standards to the establishment of international payment infrastructures. The analysis highlights both the need for multilateral collaboration on macro-financial consequences as well as the importance of interoperability between central bank digital currencies. The report also identifies various important and complex questions that are still to be further analyzed.
Keywords: International, Banking, Insurance, Securities, Climate Change Risk, ESG, Climate Change Alliance, CBDC, Digital Currencies, NGFS, Suptech, BIS Innovation Hub, Suptech, BIS
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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