The test will motivate banks, insurers and asset managers to address data gaps and to develop cutting-edge risk management approaches consistent with a range of possible climate pathways. The Bank will develop the approach in consultation with industry, including best practice insurers, and other informed stakeholders including experts from the Network for Greening the Financial System and the PRA’s Climate Financial Risk Forum. Return There is increasing evidence that sustainable investment can generate excess returns, particularly for investors, like insurers, with longer term horizons. One of the biggest hurdles to channelling mainstream finance to sustainable investment is the inconsistent definition and measurement of environmental, social and governance (ESG) criteria. An agreed taxonomy would allow markets to understand better where there is real outperformance and direct investments accordingly. The EU’s Green Taxonomy and the Green Bond Standard are good starts but they are binary (dark green or brown) and don’t account for progress from brown to green – progress that could make a significant contribution to our climate goals. One possible solution, as recommended by the UN’s Climate Financial Leaders Initiative, could be the development of transition indices which track companies in high-carbon sectors that adopt low-carbon strategies. Such approaches are essential for our citizens to make sure their money is being invested in line with their values. Conclusion Ultimately, the speed with which the new sustainable finance develops will be decided by the coherence and credibility of countries’ climate policies.

It is equally important that further progress be achieved in the area of fiscal policy reform, with continuing progress in fiscal consolidation through limits in public spending growth, allowing both a reduction in remaining budget deficits and an alleviation of the fiscal burden on corporations and households without threatening or slowing the progress in fiscal consolidation. Overall, the existence of the euro and the single monetary policy has provided the euro area with an institutional setting which leaves it significantly less exposed to external influences. Within the euro area the maintenance of price stability over the medium term, together with further progress on structural reforms, will provide an important contribution to the achievement of sustained noninflationary economic growth and will thereby also support a further solid and sustainable expansion of the world economy. Let me now give the floor to the Vice-President, who will inform you about other issues decided by the Governing Council. The Governing Council has adopted a set of standards, recently endorsed by the G10 Governors, as the minimum standards of the Eurosystem's common oversight policy on payment systems. The Eurosystem will assess all systemically important payment systems in the euro area against these "Core Principles" and will make the results of its assessments available to the public. Concerning issues relating to euro banknotes and coins, I should also like to provide you with the following information. First, the Governing Council adopted an ECB Guideline on the 2002 cash changeover.