The green swan | Central banking and financial stability in the age of climate change

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This book reviews some of the main challenges that climate change poses to central banks, regulators and supervisors, and potential ways of addressing them. It begins with the growing realisation that climate change is a source of financial (and price) instability: it is likely to generate physical risks related to climate damages, and transition risks related to potentially disordered mitigation strategies. Climate change therefore falls under the remit of central banks, regulators and supervisors, who are responsible for monitoring and maintaining financial stability. Their desire to enhance the role of the financial system to manage risks and to mobilise capital for green and low-carbon investments in the broader context of environmentally sustainable development prompted them to create the Central Banks and Supervisors Network for Greening the Financial System (NGFS).