: / / doi. org / 10. 17016 / feds. 2019. 054. mark carney ( 2015 ), “ breaking the tragedy of the horizon — climate change and financial stability, ” speech delivered at lloyd ’ s of london, september 29, https : / / www. bankofengland. co. uk / speech / 2015 / breaking - the - tragedy - of - the - horizon - climate - change - andfinancial - stability. - 5from natural disasters, energy disruptions, and sudden shifts in the value of climateexposed properties. as was the case with mortgages before the financial crisis, correlated risks from these kinds of trends could have an effect that reaches beyond individual banks and borrowers to the broader financial system and economy. as with other financial stability vulnerabilities arising from macroeconomic risks, feedback loops could develop between the effects on the real economy and those on financial markets. for example, if prices of properties do not accurately reflect climate - related risks, a sudden correction could result in losses to financial institutions, which could in turn reduce lending in the economy. the associated declines in wealth could amplify the effects on economic activity, which could have further knock - on effects on financial markets. beyond these physical risks, policymakers in some jurisdictions are assessing the resilience of the financial system to so - called transition risks : the risks associated with the transition to a policy framework that curtails emissions. the private sector is focused on climate risks. private - sector businesses — including insurance companies, ratings agencies, data companies, and actuaries — are actively working to understand climate - related risks and make this information accessible to investors, policymakers, and financial institutions. although this work is at an early stage, thousands of companies around the world are now reporting climate - related financial exposures to the carbon disclosure project ( cdp ) under the guidelines of the financial stability board ( fsb ) task force on climate - related financial disclosures ( tcfd ). 12 based on these disclosures, the cdp estimates that the 500 largest companies nicolette bartlett and tom coleman ( 2019 ), major risk or rosy opportunity : are companies ready for climate change? ( london : cdp ), https : / / 6fefcbb86e61af1b2fc4c70d8ead6ced550b4d987d7c03fcdd1d. ssl. cf3

##8 - 698. 4 / 6 large companies to switch bank financing to bond financing. a recent banco de espana ’ s research paper documents that this programme also had a positive side effect on the access of smes to funding given that banks reallocated the credit previously granted to bond issuers to smaller firms that do not have access to financial markets. 7 among the more permanent factors that could have contributed to the recent trend of financial disintermediation is the introduction of the new global banking regulation as a reaction to the financial crisis. the new regulation aims to improve primarily the resilience of banks to shocks and will have a positive impact on overall financial stability. however, as it has been documented in some papers, these regulatory measures might also reduce somewhat the ability of banks to compete in the intermediation of some financial flows8. but going forward, it is still under debate at the global level to what extent elements of the new regulatory framework should be also applicable to some non bank financing channels, as long as they might share with banking activities similar underlying risks to financial stability, such as maturity transformation and high leverage. if finally applicable, this might imply a more level playing field between banking and non bank intermediation. another permanent factor that is contributing to the development of capital markets in the eu is the launch of new markets such as the alternative stock and fixed - income markets aimed at attracting medium - sized companies, although the size of these markets is still relatively small. it goes without saying that these changes in the structure of financial markets, in combination with the emergence of new technological advances, pose a challenge for banks. particularly so against the current background of low profitability of the banking systems in europe. the arrival of new technologies has reduced the barriers to entry in certain traditional banking activities, creating the possibility for new competitors to banks, such as the fintech companies, to access bank customers in a highly dynamic manner for a relatively modest investment outlay9. but the new technologies do not only pose threats for banks, they also offer opportunities for them in terms of potential efficiency gains. one example is the application of artificial intelligence and the systematic use of large databases with real - time information and a high degree of disaggregation ( commonly known as big data ) for both their commercial business and for regulatory compliance. apart from the potential efficiency gains for banks and for the financial system as a whole, the application of some of the new technologies in the financial sector could bring other