inflation rates that are significantly down on their peaks in october, we still have a long way to go to reach our inflation target. moreover, inflation uncertainty remains high. the ecb governing council therefore will continue in its 1 / 3 bis - central bankers'speeches efforts to combat high inflation. in fact : it has already acted decisively. since july 2022, we have increased the key interest rates by a total of 400 basis points in eight consecutive steps. we have stopped net purchases under our app und pepp purchase programmes. and last but not least, we have decided to end reinvestments under the app in july. however, our job has not yet been completed. in my view, three levers must be used. first, our policy rate has to be sufficiently high. as i see it, we still have more ground to cover. we may need to keep raising rates after the summer break. second, once we have reached the peak, we will stay there until we are sure of a safe and timely return of inflation to our 2 % target. and third, we have to support this interest rate policy by reducing our balance sheet. i very much welcome the decisions to increase the pace of this reduction. 4 relationship between monetary and fiscal policy fiscal policy can significantly " support " the fight against high inflation. expansionary fiscal policy would fuel inflationary pressures. i go along with the european commission's recommendation that eu member states should phase out the fiscal measures they took in response to the energy price shock. and what is also important in my view is that governments tackle remaining high structural deficits in a timely manner. public debt that has gone off the rails must be put back on a sustainable path. this way, fiscal policy supports monetary policy beyond the business cycle, in a structural manner. sound public finances are a prerequisite for monetary policy to be able to do its job efficiently. at the european level, a set of rules was meant to take care of this. that didn't work out perfectly well. when considering an update to the fiscal rules, we should do what we can to ensure that the rules become more effective than they used to be. the commission's legislative proposals from april do not fulfil these requirements. 5 three opportunities to strengthen growth potential with sound public finances i have already mentioned one important element for prosperity in the european union. i'd like to add three more structural opportunities for growth. for one, the digital sector is an

is the most important lever. ensuring an adequate carbon pricing system is a task for elected governments, not for central banks. clearly, timely action is of the essence here. timely action would allow for a stepwise approach. it would prevent disruptive measures as well as policy errors as a result of time pressure. 3 the merits of transparency and disclosure of climate - related risks – a focal point of the ngfs agenda key insight number two is that the ﬁnancial system can drive real economic transformation through transparency and disclosure of climate - related risks. financial institutions must be put in a position in which they adequately price and manage climate - related risks. a solid foundation is needed as a ﬁrst step : a classiﬁcation system, a common “ green ” language for all parties involved. helping them to understand whether an economic activity is environmentally sustainable. the eu taxonomy is a concrete example of a common “ green ” language. it could provide orientation for others to follow suit – even if it is not a perfect solution. adequate information on climate - related risks is a key requirement for making well - informed investment decisions. reporting companies can beneﬁt directly from providing high - quality disclosure of climate - related risks. increased awareness and more informed strategic planning will help companies to manage ﬁnancial risks, particularly in the transition period to net zero. for ﬁnancial institutions, an in - depth understanding of climate - related ﬁnancial risks should be an integral part of their risk management systems. for example, a bank granting a loan must be able to determine • a company ’ s carbon footprint, • what proportion of revenues it generates from sustainable activities, and • how much it invests in sustainable business models. https : / / www. bundesbank. de / en / press / speeches / climate - risk - the - merits - of - transparency - and - the - role - of - central - banks - 851634 2 / 4 24 / 11 / 2020 climate risk – the merits of transparency and the role of central banks | deutsche bundesbank financial risks cannot always be avoided, but they must be managed, disclosed and be subject to adequate pricing. with the right information, risks can even turn into opportunities on our transition pathway to a more sustainable economy. 4 what central banks can do to encourage climate - related risk disclosure now, what can central banks do to encourage climate - related risk disclosure aside from their roles in prudential supervision and ﬁnancial stability? the starting