banks and bank supervisors, i wish to highlight the coordination carried out by the network for greening the financial system ( ngfs ), which the banco de espana joined in 2018. meanwhile, the basel committee on banking this is precisely the essence of the proposed carbon dividend act promoted by the climate leadership council, which states that “ a carbon tax offers the most cost - effective lever to reduce carbon emissions at the scale and speed that is necessary ”. supervision, which i have the honour of chairing, decided last october to commence work on the financial risks associated with climate change, while the single supervisory mechanism has decided to include climate risks in its risk map for 2020, the basis for defining supervisory priorities. 5 also of note is the work carried out by the financial stability board ( fsb ) to promote the publication by businesses of consistent and comparable financial information relating to climate change. 6 apart from international coordination, a high degree of coordination between the various economic policies is also fundamental. allow me to illustrate this with an analogy, particularly relevant to the banco de espana and the eurosystem. as we all know, the european central bank ( ecb ) has in recent years been implementing an expansionary monetary policy to achieve its inflation target, and thus support economic growth in the euro area. we on the governing council of the ecb have always insisted that the effectiveness of our measures would be increased if they were complemented by a more expansionary fiscal policy ( where the margin exists ) or an ambitious structural reform agenda. the situation of climate policy is similar. the necessary investment for the technological transformation required in our economy will hardly take place if financial conditions are not favourable or the regulatory environment penalises competition or innovation. later on i will refer to the role that can be played by the financial sector and also by supervisors, regulators and central banks. for appropriate economic policies to be designed and implemented in the climate sphere it is also essential to understand that, in the transition to a more sustainable economy, there will be individuals, sectors and even countries whose welfare will inevitably be reduced ( at least during the phase of transition to a new stationary state ). our responsibility for economic policy means we must properly identify those who are most likely to become “ losers ” and to take measures to mitigate the net negative impact on them of the transformation into a more sustainable economy. to illustrate this, let me use an example that i have referred to on other occasions : 7 the globalisation debate. from the standpoint of

, insofar as this does not interfere with the eurosystem ’ s primary objective, which is price stability. indeed, in the eurosystem we have embarked upon a strategic revision of our monetary policy. as part of this we intend to reflect on the way in which we can incorporate climate risks and promote the sustainability of the economy. for this purpose, we need, first, to improve our understanding of the implications of climate change and economic policies designed to mitigate this phenomenon for the economy as a whole and, in particular, for price stability. the overriding aim should be to incorporate these implications into the economic analysis and forecasting tools on which the decision - making process is based. 16 in addition, climate risks ( both physical and counterparty risks ) may affect other elements of monetary policy instruments and operations. in these areas, the main objective of central banks should be to ensure, along with other public authorities, that markets correctly address climate risk. once this objective has been achieved, our monetary policy collateral policies would immediately lead to an adjustment in the amounts that counterparties can obtain. these and other considerations must be analysed in the eurosystem monetary policy strategy review. however, while this review is carried out, we in the governing council of the ecb are aware, to paraphrase president lagarde that trickles become oceans if cared for. in this respect, the banco de espana has already approved the incorporation of sustainability and responsibility criteria into its investment policy for the reserve portfolio it manages. as a result, and taking into account our mandate obligations, we are progressively increasing our holdings of green bonds and, for example, we are one of the founder members of the green investment fund set up by the bank for international settlements. conclusions in conclusion, the challenges associated with climate change require coordinated action, both at international level and at the level of the various different economic policies. allow me to stress that it is governments who have the legitimacy and are best prepared to lead the process of transformation to a more sustainable economy. thus, fiscal policy should play a leading role in this process, and also in the measures needed to mitigate the social costs of the transition. in any event, the importance of the financial sector in channelling the enormous funds needed to make the investments required by this transition and to identify the opportunities that may arise in this process is unquestionable. we supervisors and https : / / www. ecb. europa. eu / press / press