I also wish to refer briefly to the 2023 Biennial Report on Climate Change Risks for the Financial System, drawn up jointly by the Banco de España, the National Securities Market Commission and the Directorate General of Insurance and Pension Funds, under the aegis of AMCESFI, the Spanish macroprudential authority. This report, which is to be published  24  lhttps://www.bankingsupervision.europa.eu/ecb/pub/pdf/ssm.202212_ECBreport_on_good_practices_for_CST~5392 27e0c1.en.pdf 25  https://carbonaccountingfinancials.com/  shortly, analyses the impact of both physical and transition risks on the financial sector under various scenarios. The provisional results suggest that a disorderly climate transition would have very adverse effects on the banking sector, far greater than those resulting from a more gradual and planned transition,26 in line with the conclusions of the 2022 climate risk stress tests and other analyses undertaken by the NGFS. Before I conclude, I wish to underline the importance of global cooperation. The fact that the EU is currently leading the global debate on sustainable finance is positive, but we need to consider that climate change requires a global effort and that many other institutions, such as the BCBS and the FSB, are also highly committed in their respective areas of competence. As the BIS recently indicated,27 the existence of ever more complex supply chains, with international connections, makes coordination essential, to ensure that firms’ most polluting activities are not transferred to jurisdictions with more lax environmental regulations. Global warming and environmental degradation are global problems and must, therefore, be tackled in a global and coordinated manner.

The costs to society from the crisis were substantial.1 By 2013, unemployment had risen by 10 million and EU GDP was some 13% below its pre-crisis trend.2 The build-up of excessive leverage in the financial system was a key element leading up to the financial crisis, and policymakers were unable to adequately address systemic risk. While many central banks communicated on financial stability issues prior to the crisis, very few countries had established national macroprudential authorities with a specific mandate and precise instruments for policy action. Some of the tools that we would today call macroprudential instruments were used by central banks in Europe during the post-war period, albeit usually for the purpose of demand management.3 But most were no longer used or were dismantled by financial deregulation during the 1980s and 1990s. And without means of enforcement, warnings published in financial stability reports prior to the crisis often went unheeded. It was only after the crisis that there was widespread recognition of the importance of the macro dimension of financial stability. 4 An internet search on the word “macroprudential” yields 5,000 hits for the eight-year period from 2000 to 2007. By contrast, the past eight years yield 120,000 hits. Despite that recognition, macroprudential policy in Europe was far from operational in 2011. Indeed, when the European rules establishing a common legal basis for macroprudential instruments for banking came into effect in January 2014, ten Member States still had not implemented them in primary national legislation.