to establishing a level playing field across banks with a constrained methodology while at the same time taking into account the specificities of some business models with a bottom - up approach allowing supervisory dialogue. 2. 2 eu - wide stress tests have helped improving market confidence in the eu banking sector ’ s resilience eu - wide stress tests have gradually and consistently improved market confidence in the eu banking sector ’ s resilience. this year, an eu - wide stress test was conducted on large european banks. starting from an already deteriorated macroeconomic environment at the end of year 2020, the exercise confronted banks with a very severe adverse scenario, which envisioned a protracted gdp contraction in a low interest rates environment. this exercise proved to be both very useful and reassuring : thanks to the improvement of banks ’ capital position with the implementation of basel 3, and despite the high level of uncertainty triggered by the ongoing pandemic, it shows that the european banking system is resilient to a very severe adverse shock. 2. 3 stress testing should also prove helpful for banks to assess and manage their exposure to climate change related risks the forward - looking perspective of stress tests should prove particularly helpful for banks and their supervisors to handle emerging risks such as climate change. building on the work carried out by the network of central banks and supervisors for the greening of the financial system ( ngfs ) : we, at the acpr and banque de france, have recently conducted such an exercise, with french banks and insurers. beyond helping us identify at an early stage their shortcomings and limitations that we will need to overcome, such stress test have provided us with initial 2 / 3 bis central bankers'speeches assessment of climate change - related risks, exposures of french financial institutions, which appears actually to be moderate. but may be more importantly, it has proved helpful to us in incentivizing financial institutions to give the proper level of priority and resources to the monitoring and management of climate - related risks. 2. 4 stress testing should also prove helpful in informing macroprudential policies while stress tests have become an important part of the microprudential toolkit, they have also taken a key role in macroprudential analysis in recent years for financial crisis prevention purposes, enabling central banks and macroprudential authorities to assess the vulnerabilities of the financial system as a whole. informing macroprudential policy with a comprehensive overview of the financial sector ’ s resilience is and will

build resilience moving forward. it is key for calibrating the levers in our macro - prudential policy toolkit. such as the mortgage measures, which aim to build resilience of both borrowers and lenders. or capital buffers that target lender resilience. the aim of macro - prudential policy is to strengthen the resilience of the economy to adverse shocks, as well as to reduce the cyclical movements in credit and asset prices that have proven so detrimental in the past. rigorous data driven analysis is part of our policy design, assessment and calibration ( central bank, 2019 ). as economists, we are always interested in new data, in looking at a topic from a different angle, or through a different lens. looking forward, the central bank of ireland ’ s central credit register and anacredit are two sources that may be able to add to our analysis of household and firm resilience. we also are also looking forward to new pension fund data coming on stream shortly. pension assets represent the second largest financial asset of irish households. the new dataset will, for the first time, allow us look through to the granular holding within each fund and better understand the risk exposures of households. non - bank financial intermediation the last crisis highlighted the need for better data to understand, and better policy to strengthen, the balance sheet resilience of households and lenders. however we must be careful not to just focus all our resources on the data gaps that were exposed in the past. we also need to develop tools to understand the world as it has changed. one area of growth since the crisis is non - bank financial intermediation, otherwise referred to as market based finance. the eurosystem ’ s household finance and consumption survey ( hfcs ) provides important information on mismatches between the assets and liabilities of individual households, in terms of their size, volatility, interest rate sensitivity and liquidity. many of the questions that can be addressed with these data have parallels with some of the issues facing policymakers regarding market based finance. the central bank of ireland actively employs micro - level data to assess and understand this sector. for example, we use this to assess non - bank financial institutions ’ engagement in credit intermediation, liquidity mismatch and leverage. we also monitor their interconnectedness with other parts of the financial system. and we engage internationally to assess and understand