covered bonds. how asset purchases contribute to the ecb ’ s objective with our monetary policy decisions in june and in particular in september, we have transitioned from a monetary policy framework based predominantly on passive provision of liquidity to a more active and controlled management of our balance sheet. bis central bankers ’ speeches this means that it is now changes in the size and composition of our balance sheet that determine our monetary policy stance – or to be more specific, the markets in which we intervene, and the magnitude and pace of our purchases. we expect such interventions to affect output and inflation through two main channels. direct pass - through effects the first is by addressing impairments in financial markets that have a direct pass - through effect to the real economy. and this effect will naturally be stronger in those markets that are more important for the transmission of monetary policy. with this in mind, we began our shift to actively deploying our balance sheet by focusing on the abs market, as this was a market that was both impaired and that had a tight link with bank lending, which is the main transmission mechanism of monetary policy in the euro area. this reinforced our overall aim to ensure there are no barriers to credit supply as credit demand progressively picks up. purchases of abs will push down market spreads on senior tranches, reduce volumes available for investors in those markets and thereby encourage banks to relieve this scarcity by originating more abs. as they can only do this by creating more loans in the first place, this ought to increase the supply of credit and reduce the price at which it is granted. the impact of these purchases will be bolstered by the scaling - up in parallel of the tltros. as banks receive cheap long - term funding on the condition that they expand loans to households and firms, the tltro will increase credit supply, which in turn should lead the price of credit to fall in a competitive environment. and both these measures will arrive in the context of the successful completion of the comprehensive assessment, which puts banks in a much stronger position to transmit our new monetary policy impulse. indeed, there is already evidence that in expectation of the roll - out of these measures, banks are lowering lending rates and increasing loan volumes. our latest bank lending survey reported a net easing of credit standards on loans to non - financial corporations and, more generally, suggests we have passed a turning point in credit growth. portfolio balance effects the second channel through which we expect asset purchases to work in the euro area is the broad portfolio

speech urgent and vitally important : 2023 as a key milestone in stepping up the management of climate and environmental risks keynote speech by frank elderson, member of the executive board of the ecb and vice - chair of the supervisory board of the ecb, at the foreign bankers ’ association ( fba ) 30th anniversary amsterdam, 27 march 2023 thank you for inviting me to the fba ’ s 30th anniversary event. as i speak to you today, the global financial system is going through turbulent weeks. in the confluence of multiple challenges, often the very urgent trumps the similarly vitally important. it is tempting and frankly quite human to focus the attention on the most immediately pressing challenges. climate - related and environmental ( c & e ) financial risks might thus not seem the most obvious topic for a keynote speech at this moment. however, exactly one week ago the intergovernmental panel on climate change ( ipcc ) published its synthesis report, according to which temperatures have already risen to 1. 1 degrees celsius above pre - industrial levels. this worrisome observation reminds us that addressing the increasing risks from the ongoing climate and environment crises is both highly urgent and vitally important. this is the reason why in this keynote i want to stress that “ we have no time to lose regarding the sustainable transformation ” ; that we need to “ step up the global ambition to meet the paris agreement goals ” ; that our world needs “ more ambition to accelerate the change towards a net - zero economy ” ; and that “ financial institutions can and must play a key role in driving the world towards net - zero carbon emissions ”. i want to talk about the importance of “ aligning credit portfolios with the objectives of the paris agreement ” and “ managing climate - related risks as a priority action ”. these words don ’ t beat around the bush. these words express clear ambitions. these words cut to the heart of the matter. however, these words did not come from the ecb, the basel committee on banking supervision ( bcbs ) or the ipcc. these are your words. and by this, i mean literal quotes from the ceos of banks that have signed the net - zero banking alliance – a group committed to achieving net - zero emissions by 2050, in line with the paris agreement. most of these banks are also members of the fba. these words show that you want to play a pivotal role in the transition to net zero. these words articulate your ambition