Thinking Financial Stability in an Era of Global Ecological Risks - Towards New Trade-Offs between Efficiency and Resilience of Complex Systems

Patrick BOLTON * Professeur, Université de Columbia et Imperial College.

Morgan DESPRÉS ** Directeur adjoint de la stabilité financière, Banque de France.

Luiz Awazu PEREIRA DA SILVA * Directeur général adjoint, Banque des règlements internationaux (BRI).Contact : luiz.apereira@bis.org.Les opinions exprimées ici sont celles de l'auteur et ne peuvent être attribuées à la BRI.

Frédéric SAMAMA **** Chief Responsible Officer, CPR, Amundi Group.

Romain SVARTZMAN ***** Économiste, Banque de France. Contact : romain.svartzman@banque-france.fr. Les auteurs remercient Paul Vignat pour son aide dans la préparation de cet article. Les opinions sont celles des auteurs et n'engagent pas leurs institutions respectives.

This article explores the potential implications on financial stability of new global and systemic ecological risks (“Green Swans”), including climate-related risks and the Covid-19 pandemic. Rather than proposing a single policy tool (such as a supposedly optimal carbon tax or measurement of climate-related risks) to address extremely complex and non-linear phenomena, it explores broader analytical frameworks that can better embrace the radical uncertainty and the need for structural transformations associated with contemporary ecological risks. An unprecedented level of cooperation among multiple players, including central banks, will be required. Such cooperation raises new challenges. In particular, it requires making difficult trade-offs between the quest for more efficiency and the need for more resilience in the governance of our complex socio-ecological systems.