nevertheless believe it could be an effective way for capital markets union to contribute to consistent pricing of risk across countries. for it will help ensure a homogeneous, but risk - consistent transmission of monetary policy decisions. 10. but capital markets union can deliver on more than just that. it can also greatly increase the efficacy of monetary policy. common to all monetary policy decisions is that their transmission to the real economy is sluggish and can sometimes be incomplete. for example, the extent to which banks are able to lower lending rates following a rate cut depends on many factors beyond the control of monetary policymakers. one can think of the level of competition in the banking sector, or the health of bank balance sheets. a successful capital markets union will open up entirely new channels for the transmission of monetary policy to the real economy, making central bankers much less dependent on a single sector for the transmission of its policy decisions. in that sense, central banks can diversify the channels through which they can influence the economy, adding to its effectiveness. 11. note that economic agents can benefit from capital markets union in a very similar way. households and firms can diversify their dependency on financing, if alternative sources of finance are in abundance, making themselves less vulnerable to risks stemming from a single sector. a well - diversified financial structure increases the resilience of the balance sheets of households and corporations to shocks. and the resilience of the economy as a whole. and when an economy is better able to cope with external shocks, monetary policy will not get distracted from pursuing its primary remit : delivering price stability. 12. the latter is even more relevant for monetary policy in a monetary union. structural differences between national economies imply that the euro area economy is prone to asymmetric shocks. private sector risk - sharing across countries can greatly enhance a smooth transmission of such shocks. this is what capital markets union can accomplish, for an increase in the cross - border holdings of financial instruments will enhance risk - sharing across the euro area, thus improving the functioning of the monetary union. 13. however, capital markets union is no silver bullet. clearly, its introduction does not absolve us from pursuing prudent policies in other policy areas, too. moreover, it will take time before we can reap the full benefits of capital markets union. but there can be no doubt that it will prove an important complement to banking union in enhancing the functioning of our monetary union. 14. at the same time, capital markets union will

and you destroy the economy. this is not some kind of a flower power, tree hugging exercise. this is core economics. even if i couldn't care less about the planet, i would say exactly the same thing. " in other words : financial institutions need to speed up their own transition to a tri - dimensional decision framework for investment and lending decisions. a framework that is not defined by the traditional risks and returns, but by risk, return and impact. 1 / 4 bis - central bankers'speeches what does that entail? the world bank defines impact investing as an approach that aims to contribute to achieving measurable positive social and environmental impacts. an approach that looks to the future instead of to the past. impact investing and lending creates a significant opportunity to mobilise capital into investments that target measurable positive social, economic, or environmental impact alongside financial returns. i consider it important that financial institutions start making conscious decisions to invest in, or lend to, counterparties that have the capacity to generate measurable positive impact, in whatever form. i know, adopting this impact framework can be scary : financial institutions have a tendency towards herd behaviour and feel a substantial'first - mover disadvantage '. but if we move towards this framework, this mindset, together, the impact will not only be bigger, but we will also find safety in numbers. and let's be honest : it is not only our own decision to make. it is what investors, clients and partners demand. maybe we tend to see them as the pawns, whereas profit is king in the financial sector. however, as anatoly karpov said : " pawns not only create the sketch for the whole painting, they are also the soil, the foundation of any position. " so, if we base our position on the esg mindset, if we incorporate impact investments and loans into our portfolios, we will not only create proper and prudent risk management, but we will also paint a sustainable future. how can financial institutions make this work? by making choices. first choice : tailoring the operational primary processes – like investment processes and customer acceptance, credit judgement and revision – towards impact investments. that means that impact needs to be part of the parameters for decisions about investments, next to risk and return. that can be scary ; it means daring to move away from the broad market benchmark and choosing a smaller portfolio of impact - oriented companies. and we have to make clear what