the banking supervision committee ( bsc ). the bsc is a forum for cooperation among the national central banks and supervisory authorities of the eu and the ecb. the collaboration with the bsc has meant that the review draws upon a very broad knowledge - base and the analysis contained within it blends together the macro perspectives of central bankers with the micro perspectives of supervisors. over the past seven years the driving force behind the development of financial stability analysis at the ecb, both at the conceptual and practical level, has been tommaso padoa - schioppa. as you are aware, today is also mr. padoa - schioppa ’ s last working day at the ecb. i would therefore like to take this opportunity to express in the name of the ecb my deep gratitude for the work he has undertaken as a founding member of the executive board and of the governing council, as well as for the inspiration he has provided for the work of many of the committees and working groups that together form the flesh and blood of the eurosystem. in this vein, the financial stability analysis, in particular, is an area that, i am sure, will continue to be shaped by the guidance provided by mr padoa - schioppa. let me now give the floor to mr padoa - schioppa, who will present to you the main findings of the analysis in the june financial stability review.

differ in their regional impact. these risks are also expected to increase in the coming decades, with some likely to be concentrated in particular geographical areas. floods are the most significant hazard in central and northern europe, for example, while heatwaves, droughts and wildfires represent the greatest risks in southern europe. taken together, around 30 % of the credit exposures of euro area banks are to businesses with high or increasing exposure to at least one source of physical risk. ultimately, the impact of climate change on financial stability depends on the degree of concentration of exposures, and what mitigation measures are in place. both fronts give cause for concern. over 70 % of identified physical risk exposures in the euro area are held by just 25 banks. there is also a notable concentration by country ( chart 2, left panel ), suggesting that physical risk could become a prominent source of asymmetric shocks. moreover, the physical collateral backing loans may itself be damaged by the event, exacerbating the risk to banks. chart 2 exposure concentration and insurance as a mitigating factor sources : anacredit, 427 data, emdat, oecd and ecb calculations. notes : left panel : credit exposures to non - financial corporations ( nfcs ) above €25, 000 are considered ; €4. 2 trillion of exposures overall ; nfc location used to assign risk levels refers to the corporations ’ headquarters ; country breakdown refers to the bank ’ s country of residence. right panel : sample includes 45 countries for which the oecd provides quarterly gdp data from 1996 to 2019. the chart shows the impact of large - scale natural disasters ( i. e. with total damage larger than the third quartile at 0. 1 % of gdp ) when the share of insured losses is high ( above the median of 35 % ) on the left, and low ( i. e. below the median of 35 % ) on the right. the estimates are obtained using a panel regression model where the dependent variable is the year - on - year difference in the log of gdp and the explanatory variables include two dummies capturing large - scale disasters with a high and low share of insured losses respectively ( included with up to three lags ), and country and quarterly fixed effects. for the quarter including the date ( s ) of the disaster ( t = 0 ) and the three subsequent quarters, the y - axis measures the percentage point impact of