effects of moving towards a low carbon economy and the uncertainties related to this timing and speed of the adjustment. 17 in order for this transition to take place, it will need nancing. the nancial sector has a big role to play to intermediate savings to investments that will help us transition to a low carbon economy. green bonds is a starting point, but as my colleague at the bank of england, governor mark carney has noted, green nance will need to be mainstream. 18 central banks can contribute to creating an environment where climate related nancial risks can be more ef ciently assessed and considered. but rst we must have clear de nitions of what sustainable products and investments are. the european commission has taken steps towards this goal with its action plan for sustainable nance. the central bank has contributed to this work, looking at the integration of sustainability risks and factors. 19 in addition, we are members of the network for greening the financial system ( ngfs ). this is a group of central banks and supervisors who exchange experiences and share best practices. 20 the group aims to contribute to the development of environment and climate risk management in the nancial sector and to mobilize mainstream nance to support the transition toward a sustainable economy. i am encouraged by the greater sense of urgency and the louder calls for action surrounding climate change we have seen and heard in recent weeks and months. this requires a coordinated global policy response, across countries and governments, across social, economic, public and private bodies. demography and the world of work the third and nal issue i wish to turn to demographics. how will societies cope with aging populations and lower birth rates. this is a topic that may seem less pressing, however that does not mean we can be complacent. it is an area that will have macroeconomic implications and so is an area we need to better understand. as fertility rates decrease and life expectancy increases ; the dependency ratio, the share of the old and the young that depend on the working age population is rising, particularly in advanced countries. relative to our european neighbours, we are a young nation, ireland has the lowest proportion of over 65 year olds. 21 further, in comparison to other european countries, ireland is estimated to have public ageing costs at the lower end of the scale. 22 in some ways we are behind the european ageing curve, it is a more pressing issue for our neighbours right now. but we should not be compl

of household debt to disposable income. 13 in order to prevent future occurrences of such damaging over - indebtedness to households, the central bank introduced so called macroprudential tools to guard against excessive loosening of lending standards in the economy. it is important to recall that neither the price level, nor the level of growth of house prices are the objective. moreover overall housing policy is not within the mandate of the central bank. rather, the mortgage measures – which we have now had in place for a number of years – are designed to build the resilience of both borrowers and lenders. these measures are designed to prevent a re - emergence of a credit price spiral. so that a pool of borrowers aren ’ t chasing a smaller pool of houses at ever higher prices fuelled by credit. and while the supply of credit is one piece of a complex housing market, one thing is certain, higher levels of indebtedness for families are not going to solve the complex issues at play. instead, higher debt burdens increase the vulnerability of families and households in the event of a future downturn. climate change, social and economic vulnerabilities when thinking of long term macroeconomic challenges, issues that intersect economic and social realms, climate change is a crucial issue. it is an area where we need to work towards solutions, where progress needs to be made, and urgently. there are substantial climate risks, and these touch all sectors of society, households, governments, businesses, and banks or the nancial system more widely. from a central banking perspective, these risks can be thought of as transitional and physical. the physical risks are the climate related damage, the lost lives, the economic cost. it is not hard to think of the physical signs of this change, the extreme weather events that are increasingly on the news, or that july 2019 was recorded as the hottest month on earth. 14 these physical risks affect the nancial system most directly through the insurance sector. it is worth noting that when these physical risks materialise, there is a further risk that they will be felt most by people in lower income countries, regions or households, so called climate injustice. 15 as a central bank, we look at the many channels of physical risks to the nancial system, however tonight i will not focus on these. 16 an area of climate change where the central bank has been relatively more focused is on transitional risks. these can be thought of as the cost or