a green economy comes at a cost and this will affect the banks through various channels, the most prominent one being their exposure to businesses that produce high carbon emissions. it is therefore of paramount importance for banks to develop appropriate strategies and risk management practises to alleviate the longterm, direct and indirect, effects of climate change. from the regulatory perspective, we are conducting for the first time a climate related stress test for the significant eu bank institutions and we are also planning to carry out both on site and off site inspections to assess the readiness of the banks to deal with this type of risks. let me be clear ; both banks and supervisors are still on the learning curve with regard to climate - related and environmental risks. however, we both need to adapt and we need to adapt as soon as possible. the second emerging risk, is the it and cybersecurity risk. the constantly increasing employment of digital strategies by banks which has been boosted further by the pandemic and the banks'increasing dependence on it infrastructures raises the need and the requirement to constantly enhance their protection against cyber threats. according to the bank of international settlements as well as the international monetary fund the financial sector ranks high in frequency of cyber security events when compared to other sectors and these events have tripled over the last decade. the interconnectedness of the financial system means that a successful attack on a major 2 / 5 bis - central bankers'speeches financial institution may spread rapidly through the financial system with potential adverse effects on the stability of economies. in addition to the risks mentioned above, banks are also facing increasing competition emanating from new entrants in the market. for example in cyprus, there are currently 15 authorised electronic money institutions and 10 authorised payment institutions. but that number is likely to change dramatically. there are currently at the central bank of cyprus 44 pending licencing applications ( 33 emis and 11 pis ), which is twice the figure compared to the applications pending only a year ago. notably, this number is significantly higher than the 11 local and foreign authorised banks and subsidiaries in our country. in the last few years, payments services regulation has allowed a number of payment institutions to make use of the banking industry's interfaces for accessing payment service users'accounts online. these fintech companies, which possess some advantages over traditional banks such as state - of - the - art technology and no legacy operating infrastructures, have taken advantage of the opportunities offered by payment services regulation and exert additional

rapid credit growth have resulted a few years down the line in a deterioration of the quality of banking assets and financial intermediaries ’ balance sheets, and in a slowdown in domestic demand. although the chinese financial system has some features that differentiate it from others, there is no denying that any difficulties in this field could have negative effects on china ’ s growth for a longer period. if so, it would hurt world growth and commodity prices, particularly for copper. a second risk coming from abroad has to do with the way emerging economies will accommodate the withdrawal of monetary stimulus packages in developed countries. the credit conditions facing emerging economies have tightened, which is causing financial, exchange - rate and inflationary difficulties in those where vulnerabilities built up during the boom. special attention deserve the economies with high external financing needs, including not only emerging ones but also some in peripheral europe. finally, there is still the risk associated with the complex fiscal and financial situation of the eurozone. add to this the bis central bankers ’ speeches intensifying geopolitical tensions in the middle east, which could significantly affect the oil price, causing negative effects on world growth and higher pressures on fuel inflation. in chile, although the economic slowdown is underway, it is possible that final demand, particularly private consumption, continues to adjust at a slower - than - desired pace, increasing the risk of higher inflation and a constant or growing current - account deficit. the risk of a wider current - account deficit would increase in a scenario of further deteriorated terms of trade. however, as we have pointed out before, this deficit comes largely from investment flows into the tradable sector – especially mining – financed by foreign direct investment. the recent slowdown of investment and the exchange rate depreciation are some of the adjustments needed. moreover, the evidence shown in a box in this report suggests that the mining investment cycle is maturing. this will moderate domestic demand and pressures over internal resources, the labor market and imports of capital goods. meanwhile, the startup of mining projects has driven volume exports up. all of this points at more favorable current - account balances in the medium term. anyway, for the purposes of assessing this risk we also need to review the evolution of the deficit measured at trend prices. in this sense, news is pointing in the right direction, because the estimate for this year went from 5. 7 % of gdp last march, to 4. 9 % in this report. we estimate that in 2014 it will