transform climate adaptation strategies in agriculture14 ( e. g. through optimized water use, early warning systems on invasions of alien species and selection of resistant crop varieties in response to climate change scenarios ) and in the insurance sector15 ( e. g. providing vast amounts of data to improve climate risk assessment and the pricing policies for climate - related damage protection ). bi, k. et al., 2023. accurate medium - range global weather forecasting with 3d neural networks, nature, 619, 533 - 538. lam, r. et al., 2023. learning skillful medium - range global weather forecasting, science, 382, 6677, 1416 - 1421. kyungmee, k. and boulanin, v., 2023. artificial intelligence for climate security. possibilities and challenges, stockholm international peace research institute. de baerdemaeker, j. et al., 2023. artificial intelligence in the agri - food sector, scientific foresight unit, european parliamentary research service. mclaughlin, m., 2022. climate change is a major challenge for insurers, but ai and cloud can help, ibm ibv blog. digital solutions can help with climate disclosure and climate - risk identification other areas in which digital innovation can help with climate transition are the assessment and selection of tools to channel funds towards green and sustainable finance, the progress in sustainability disclosure, the collection of climate - related information, and the evaluation and monitoring of climate - related financial risks, just to name a few important themes. let me briefly describe some of the efforts in these areas. first, the bis innovation hub and banca d ’ italia launched the g20 techsprint initiative in 2021, a global technological competition in the form of a long hackathon designed to show the potential for new technologies, new ( big ) data, and other innovations to leverage on the potential synergies between digitalization, finance and the energy transition. 16 another initiative in which banca d ’ italia was involved is the 2021 first call for proposals by the milano hub, the banca d ’ italia innovation centre located in milan. some of the projects developed under this umbrella showed how technology, and particularly ai, can contribute to improving financial services, in terms of esg data collection and production. 17 second, supply chain partners, financial regulators and financial entities increasingly require that companies, including small and medium enterprises ( smes ),

rules and imposing safeguards. it is critical, when managing crises, to have appropriate tools available to limit their impact on and costs to society and to prevent isolated events from turning into systemic ones, with ripple effects on the economic and social outlook. in the us regional banking sector, the business models of the banks that were hit displayed serious weaknesses, with an excessive interest rate risk exposure and highly concentrated funding skewed towards large, and therefore uninsured, customer deposits. poor corporate governance played a crucial role in these crises. other factors likely contributed, including the failure to fully apply international regulatory standards to banks deemed non - systemic, lapses in supervision, the speed with which fears about the banks ’ solvency spreads through digital channels and the ease with which new technologies allow depositors to transfer funds. in the european union banking system, in part thanks to stricter regulations and a supervisory approach that focuses on business model sustainability, no signs of situations akin to those in the us have emerged. however, market turbulence serves as a warning of how quickly investor confidence can crumble and, as a result, how the risks to financial stability should never be underestimated. rather, it underscores the need for a prudent, data - dependent monetary policy. italy, like the other euro - area countries, has not witnessed unusual outflows of deposits. since july of last year, when deposits peaked at almost €1, 620 billion, this source of funding has fallen by 6 per cent, reflecting the natural reduction in the liquidity accumulated during the pandemic and customers ’ pursuit of higher - yield investments, better able to shield savings from inflation. the reduction in deposits has had a modest impact on the liquidity coverage ratio and the net stable funding ratio, which remain well above the regulatory minimum requirements. banca d ’ italia the governor ’ s concluding remarks annual report 2022 rising interest rates have caused the value of portfolio securities to fall. the unrealized losses on those securities that banks plan to hold until maturity ( booked at amortized cost ), estimated to have an average impact of 200 basis point on the cet1 ratio, would only materialize if banks were compelled to sell them before maturity. less than 2 per cent of these unrealized losses are currently accounted for by banks with a relatively low liquidity coverage ratio. more generally, the well - developed mechanism that regulates the use of central bank asset - backed refinancing in the euro area helps