present none of the banks under our supervision fully meets all our expectations, each and every of our expectations has already been fulfilled by at least one bank. this shows that progress is possible, and that it is not just taking place among a few banks, but across the board. this is good news, since we expect all banks under our supervision to be fully aligned with our supervisory expectations by the end of 2024. implementation challenges and good practices now i understand that some ssm banks are facing implementation challenges. integrating c & e risks into standard risk management is not an easy task. but while demanding, it is far from impossible. let me illustrate this with a few concrete examples of how banks can use good practices to overcome remaining stumbling blocks. for instance, it is not straightforward to quantify transition risks in a forward - looking manner given the continuous evolution of emission reduction policies. think about higher carbon prices for high - emitting steel and cement producers under the reformed 3 / 6 bis - central bankers'speeches eu emissions trading system or the ban on the sale of new petrol and diesel cars from 2035. to show how this can be done, the ecb recently published a report quantifying the most pronounced transition risks in banks'credit portfolios using " alignment assessment ". this methodology is already being developed by banks and supervisory authorities, and i would encourage more banks to leverage it to get a better grip on transition risks. another example is climate - related litigation, which has sky - rocketed in recent years. 6 around the world, some 560 new cases have been filed since 2021, and they increasingly target corporates and banks. admittedly, measuring and managing these risks is challenging. promisingly, however, some banks are already quantifying reputational risks using scenario analysis or started allocating capital towards litigation risks in the internal capital allocation. financial risks are not limited to climate change. we are currently witnessing an unprecedented decline in natural ecosystems and the vital services they provide such as pollination, clean water or healthy soil. this also matters for banks, given that 75 % of all bank loans in the euro area are to companies that are highly dependent on at least one ecosystem service. 7 however, assessing nature - related risks is complex. unlike for climate risk, which can be measured in terms of carbon emissions, there is no single indicator that would facilitate quantification of nature - related risks. encouragingly, several banks have already implemented risk management practices focusing explicitly on nature - related risks

the second half of next year and throughout 2008. slower u. s. growth has clearly caused canadian gdp growth to fall short of expectations in the second and third quarters. after expanding at a 3. 6 per cent annual rate in the first three months of this year, gdp growth slowed to only 2 per cent in the second quarter, and we expect a similar figure for the third quarter. but it's important to think of this as a mild, and likely very short - lived, cyclical slowdown for canada. with near - term weakness in the u. s. economy, net exports will likely exert a considerable drag on canadian growth. however, consumer spending and business investment are expected to remain robust. overall, we at the bank of canada project 2. 8 per cent growth for real gdp in 2006, slowing to 2. 5 per cent next year but coming back up to 2. 8 per cent in 2008. core inflation is expected to move a bit above 2 per cent in the coming months but return to the 2 per cent target by the middle of 2007 and remain there through 2008. total inflation will likely average about 1 1 / 2 per cent through the second quarter of 2007, before returning to the 2 per cent target and remaining there through to the end of 2008. the main upside risk to the canadian economy continues to relate to the momentum in household spending and housing prices. this momentum is linked to strong consumer credit growth. by increasing home equity and thus expanding the availability of collateral, the recent strong increases in house prices have contributed to robust growth in consumer credit. there is a risk that these linkages could be stronger than assumed or that house prices could continue to grow more rapidly than expected, resulting in higher - than - projected household spending and, hence, greater upward pressures on inflation. the main downside risk to the canadian economy relates to the possibility of a sharper slowdown in the housing sector in the united states and a broadening of the weakness in the housing sector to consumption and investment. a larger decline in domestic demand in the united states would lead to decreased demand for canadian exports and broader weakness in the canadian economy. this development would also lead to lower inflation. the slower growth in the u. s. economy is a sharp reminder of just how important a role its powerful appetite plays in absorbing the exports of many countries and just how critical that strong u. s. demand has been to global economic growth. of course, the united states has been far from