The forthcoming NGFS work should therefore also focus on shorterterm horizons (2030, and not only 2050) as the transition to a low-carbon economy may be less linear than anticipated, with tipping points accelerating the transition in a disorderly way. [Slide] We generally need to better understand the long-term trade-off, in terms of GDP, between transition and physical risks and the cost of delayed action. The chart breaks down the GDP losses under three scenarios into the costs of transition and physical damages. Under the “Paris Agreement” scenario, GDP would be 5% lower in 2060 and around 7% lower in 2100, and most of this reduction can be attributed to transition policies. Under the two “Too-little too-late” scenarios, the transition costs are limited, but by the end of the century the impact of physical risks becomes much larger, leading to overall losses that could range between at least 10 and 20% of world GDP level. From an economic and rational standpoint, the prescription is clear-cut: an orderly transition would require a governmental forward-looking guidance, sending long-term signals and anchoring credible but ambitious commitments. This “climate forward guidance” should include an appropriate pricing of carbon; and as long as we don’t have such global pricing, a carbon border adjustment mechanism (CBAM), as recently put forth by the EU in order to prevent carbon leakage is appropriate. We all know how politically sensitive these issues are, domestically as well as internationally.

Proposal for a Regulation on digital operational resilience for the financial sector6 The Regulation contains the following basic concepts: - introducing requirements for the management by financial entities of the ICT-related risks and for the reporting to the competent authorities of major ICT-related incidents and digital operational resilience testing; - sharing information on cyber threats and vulnerabilities; - prescribing measures for the sound management by financial entities of the risk related to ICT third-party service providers; - introducing requirements for the contractual arrangements between ICT third-party service providers and financial entities; - establishing an oversight framework for critical ICT third-party providers when providing services to financial entities. 5.2. Proposal for a Regulation on Markets in Crypto-assets7 The Regulation defines the notion ‘crypto-asset’8 and lists the main types of cryptoassets, distinguishing between three sub-categories of crypto-assets: - Asset-referenced tokens9. Such tokens may be offered to the public only by credit institutions authorised to operate in the EU or by entities which hold the authorisation referred 6  https://eur-lex.europa.eu/legal-content/BG/TXT/HTML/?uri=CELEX:52020PC0595 https://eur-lex.europa.eu/legal-content/BG/TXT/HTML/?uri=CELEX:52020PC0593 8 ‘Crypto-asset’ means a digital representation of value or rights which may be transferred and stored electronically, using distributed ledger technology or similar technology; 7  4  to in the Regulation. However, issuers should always draw up and publish a crypto-asset white paper – a special information document which must comply with mandatory content and form requirements.