The central bank yesterday introduced a series of regulatory measures that respond to the predicted effects of climate change on the nation’s economy and financial system, as Taiwan seeks to achieve net zero carbon emissions by 2050.
The top monetary policymaker said it has mapped out a framework for advancing two main policy goals — bolstering Taiwan’s economic and financial resilience with regard to climate change risks, and supporting a smooth transition to a sustainable green economy.
The central bank said it is cooperating with the Financial Supervisory Commission to help create a favorable environment for green and sustainable investment, bolster its understanding of climate risks, and factor those risks into daily operations and foreign exchange reserve management.
Photo: Liao Chen-hui, Taipei Times
Specifically, the bank said it would factor in climate change risks when projecting national GDP growth and establish models for each economic sector to gain a better understanding of the risks involved.
Further, the central bank plans to include sustainable financial performance into its open market operations, and use the measure on small-amount repurchase operations as a reference when processing deposit renewals and transfers.
The central bank said it would also conduct research on climate change risks as part of a macro-prudential tool, and invite experts and academics to conduct a stress test of financial institutions based on climate change risks.
Additionally, the bank said it would consider purchasing green bonds when managing foreign exchange reserves, and promote participation in international discussions and activities regarding climate change issues.
The bank has taken part in discussions and online meetings with Southeast Asian central banks and the Network of Central Banks and Supervisors for Greening the Financial System, it said.
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