of its normal lending to banks and, now, to primary dealers. in the case of currency swaps, the foreign central banks are responsible for repayment, not the financial institutions that ultimately receive the funds ; moreover, as further security, the federal reserve receives an equivalent amount of foreign currency in exchange for the dollars it provides to foreign central banks. liquidity provision by the central bank reduces systemic risk by assuring market participants that, should short - term investors begin to lose confidence, financial institutions will be able to board of governors of the federal reserve ( 2008 ), " fomc statement and board approval of discount rate requests of the federal reserve banks of new york, cleveland, richmond, atlanta, minneapolis, and san francisco, " press release, december 16. primary dealers are broker - dealers that trade in u. s. government securities with the federal reserve bank of new york. the new york fed's open market desk engages in trades on behalf of the federal reserve system to implement monetary policy. meet the resulting demands for cash without resorting to potentially destabilizing fire sales of assets. moreover, backstopping the liquidity needs of financial institutions reduces funding stresses and, all else equal, should increase the willingness of those institutions to lend and make markets. on the other hand, the provision of ample liquidity to banks and primary dealers is no panacea. today, concerns about capital, asset quality, and credit risk continue to limit the willingness of many intermediaries to extend credit, even when liquidity is ample. moreover, providing liquidity to financial institutions does not address directly instability or declining credit availability in critical nonbank markets, such as the commercial paper market or the market for asset - backed securities, both of which normally play major roles in the extension of credit in the united states. to address these issues, the federal reserve has developed a second set of policy tools, which involve the provision of liquidity directly to borrowers and investors in key credit markets. notably, we have introduced facilities to purchase highly rated commercial paper at a term of three months and to provide backup liquidity for money market mutual funds. in addition, the federal reserve and the treasury have jointly announced a facility that will lend against aaa - rated asset - backed securities collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the small business administration. the federal reserve's credit risk exposure in the latter facility will be minimal, because the collateral will be subject

sabine mauderer : walking the talk - transition plans as catalysts for the net - zero transition speech by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the 9th green finance forum " changing or pretending – between ambition and reality ", euro finance week, frankfurt am main, 14 november 2023. * * * check against delivery 1 looking back and moving forward ladies and gentlemen, who here still remembers the 1970s? probably not too many of you. let us wind back the clock fifty years. what can we see? first, we see a war in the middle east and surging energy prices. second, as a result, we see decision - makers debating measures to reduce energy costs and to increase energy efficiency. think about the car - free sundays in germany, for instance. third, we see a global economy facing weak growth and high inflation. fifty years later, we are in a different setting but it might be helpful to take into account some of the lessons learned back then. the horrific attacks by hamas on israel on 7 october have sparked a new escalation of violence in the middle east. the conflict is adding to economic uncertainty at a time when the global economy " is limping along " 1 – to use the words of the imf – and inflation has not yet been completely defeated. in particular, the flare - up of violence poses renewed risks to energy prices. this comes just a year and a half after russia's invasion of ukraine sent global energy prices soaring. these events, like those of 1973, highlight just how vulnerable western economies are to swings in energy markets because of their heavy dependence on fossil fuels. there are two important levers we can use to reduce this vulnerability. first, we ought to increase energy efficiency – so we can get more bang for our watts. second, we need to ramp up our use of renewable energy to lower the carbon intensity of the energy we consume. experience gained fifty years ago offers valuable lessons. back then, german companies faced strong economic headwinds, too. amid these challenges, they proved their innovative strength and their ability to adapt their business models to the changing conditions. high energy prices prompted substantial efficiency improvements and research into alternatives to fossil fuels. 1 / 4 bis - central bankers'speeches of course, history is not repeating itself – there are important differences between the 1970s and now. today, german firms and other european corporates have understood that they need to wean themselves off