me to determine whom banks should lend to. instead, what i and other banking supervisors around the world have consistently been emphasising is that a failure to adequately manage climate - related and environmental risks is no longer compatible with sound risk management. to manage their own risks, banks need to engage with their customers to gain a deep understanding of how they are being affected by the climate and environmental crises and how they will mitigate and adapt to the consequences. conclusion let me conclude. leonardo da vinci – a resident of florence when finance first thrived back in the early days of the renaissance – is believed to have said that “ nature never breaks her own laws ”. indeed, nature ’ s laws are a constraint on human activities that we cannot set aside. after all, we are an integral part of nature. we have been pushing the boundaries of this constraint for far too long and the devastating consequences are now increasingly upon us. yet we do have the power to bend this trend we ourselves set in motion. this requires us to be mindful of the gaps that perpetuate the destructive trend and to work relentlessly towards closing them. only then can we change nature ’ s current course and ensure a paris - aligned transition path. each and every one of us must act in our areas of competence and responsibility. respecting nature ’ s laws. conscious of her precariousness, preserving her preciousness. thank you for your attention. 1. copernicus ( 2023 ), “ global temperature trend monitor ”. 2. see figure 1 in abraham, l., o ’ connell, m. and arruga oleaga, i. ( 2023 ), “ the legal and institutional feasibility of an eu climate and energy security fund ”, occasional paper series, no 313, ecb, frankfurt am main, march. 3. the exact amounts are subject to uncertainty and depend, among other things, on which other policy measures are taken and which specific objectives are targeted. 4. this mechanism is called the carbon border adjustment mechanism. 5. de haas, r. and popov, a. ( 2019 ), “ finance and carbon emissions ”, working paper series, no 2318, ecb, frankfurt am main, september. 6. lagarde, c. ( 2021 ), “ towards a green capital markets union for europe ”, speech at the european commission ’ s high - level conference on the proposal for a corporate sustainability reporting directive, 6 may. 7. avgoust

% in february, after – 0. 9 % in january, continuing its gradual recovery from a trough of – 3. 2 % in february 2014. in this respect, the april 2015 bank lending survey confirms that improvements in lending conditions support a further recovery in loan growth, in particular for firms. despite these improvements, the dynamics of loans to non - financial corporations remain subdued and continue to reflect the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non - financial sector balance sheets. the annual growth rate of loans to households ( adjusted for loan sales and securitisation ) increased further to 1. 0 % in february 2015, after 0. 9 % in january. the monetary policy measures we have put in place should support further improvements both in borrowing costs for firms and households and in credit flows across the euro area. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirms the need to implement firmly the governing council ’ s recent decisions. the full implementation of all our monetary policy measures will provide the necessary support to the euro area recovery and bring inflation rates towards levels below, but close to, 2 % in the medium term. monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. however, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively. given continued high structural unemployment and low potential output growth in the euro area, the ongoing cyclical recovery should be supported by effective supply - side measures. in particular, in order to increase investment, boost job creation and raise productivity, both the implementation of product and labour market reforms and actions to improve the business environment for firms need to gain momentum in several countries. a swift and effective implementation of these reforms will not only lead to higher sustainable growth in the euro area but will also raise expectations of permanently higher incomes and encourage both households to expand consumption and firms to increase investment today, thus reinforcing the current economic recovery. fiscal policies should support the economic recovery while remaining in compliance with the stability and growth pact. full and consistent implementation of the pact is key for confidence in our fiscal framework. in view of the necessity to step up structural reform efforts in a number of countries, it is also important that the macroeconomic imbalance procedure is implemented effectively in order to address the excessive imbalances as identified