no public and very little private risk - sharing. 2. risk - sharing within monetary unions in the classical optimum currency area ( oca ) literature, what makes membership of a monetary union work for all its members is a trade - off : what they lose in terms of national stabilisation tools is counterbalanced by new adjustment mechanisms within the currency area. these mechanisms are typically held to be labour and capital mobility, as well as fiscal transfers between different parts of the union. 6 in other words, they are ex post and take place after a recession has set in. in the united states, which is a relatively well - functioning monetary union, ex post adjustment plays an important role. fiscal transfers through the us federal budget are estimated to absorb around 10 % of shocks7, while about half of the long - run response to a rise in unemployment takes place through labour mobility. 8 but the outcomes achieved in the us are not substantially different to those in the euro area. though the euro area does not have a large central budget, national fiscal policies can still provide significant stabilisation, so long as countries can use fiscal policy freely. it is estimated that 49 % of an unemployment shock is absorbed by the automatic stabilisers in the euro area, whereas the figure for the us is 32 %. 9 and studies have found a gradual convergence in labour mobility between europe and the us, reflecting both a fall in interstate migration in the us and a rise in the role of migration in europe. 10 where the euro area and the us differ more is in terms of ex ante risk - sharing – that is, insuring against shocks through financial markets. this was a concept that only appeared later in the literature on optimal currency areas. 11 but it plays a key role in stabilising local economies in a monetary union, in two ways. 12 the first is by de - linking consumption and income at the local level, which happens through integrated capital markets. if labour income falls during a recession, but the private sector holds a diversified financial 3 / 9 bis central bankers'speeches portfolio, people can smooth their consumption with the financial returns they receive on assets in better performing parts of the union. the second way is by de - linking the capital of local banks from the volume of local credit supply, which happens through retail banking integration. because local banks are typically heavily exposed to the local economy, a downturn in their home region will lead to large losses and prompt them to cut lending to all

by banks that were not yet doing it, showing banks'1 / 3 bis - central bankers'speeches willingness to integrate energy performance data into their credit risk management policies. this is good news. however, as supervisors, we are also concerned about the existing stock of loans. most of the data on this are based on proxies, which makes it difficult for both banks and supervisors to design and implement proper risk management measures. obtaining real data is admittedly challenging, yet many of the banks represented here today have made notable strides. you have found a way to collect energy performance data and use them effectively. and we invite all banks that have not yet advanced on collecting such data to learn from the good practices of those banks that have made critical leaps forward. legislative changes will improve the availability of energy performance data integrating climate - related data is also vitally important in view of impending legislative changes. the revised energy performance of buildings directive1, which includes common requirements for setting up national databases on the energy performance of buildings, is an important development that should help narrow the data gap. in the spirit of the directive, further work is needed to ensure adequate data management and increase the reliability and consistency of climate - related real estate data across the european union. establishing a comprehensive european database of all buildings in the eu will take time. so banks cannot just sit back and wait. as supervisors we expect banks to manage all material risks. and this requirement is not conditional on the attainability of harmonised data. we therefore strongly encourage all efforts to improve data availability and welcome the successful strategies that some banks have implemented to address data gaps. today's agenda will focus on the collection of energy performance data for the commercial and residential real estate sectors. but this will not be the only topic. properties in areas prone to hazard events such as floods, rising sea levels or wildfires are increasingly vulnerable and could see a decrease in their collateral value. last week's devastating floods in austria, czechia, hungary, italy, poland, romania and slovakia were a stark reminder of that. therefore, later in today's programme we will discuss the challenges and potential solutions for monitoring physical risk. in the coming weeks, the ecb will publish an analytical paper focusing on whether residential mortgage rates in high climate risk areas are influenced by this risk. the paper finds evidence that climate - related risk is already priced into mortgages. in other words, we see that an average bank took climate - related risks into account as loans