bonds in the bonds of the countries most exposed to rising yield spreads. if fragmentation were to worsen significantly, we have other options, such as adjusting the existing instruments or launching new ones when this is needed to secure monetary policy transmission along the path of policy normalisation. [ structural changes ] this brings me to my last point – structural challenges, including those brought about by climate change. both society and our financial system are facing some structural shifts and challenges. some of the drivers of past deflationary pressures have lost steam, such as global trade liberalisation and the reliance on the existing global supply chains. at the same time, some structural inflationary factors are gaining momentum, namely the green transition, strengthening of the eu ’ s strategic autonomy and the reorganisation of global supply chains with possible nearshoring. there will still be some deflationary forces at play, such as rapid digital transformation, other forms of innovations and elevated debt levels, but there is a question as to what extent these factors could overcome the inflationary forces. in the medium term it therefore seems possible that inflation will settle at higher levels than we have observed in recent years, even after the existing supply shocks fade. [ climate change considerations ] regarding the green transition, the primary role here lies with governments, as they have the power and democratic legitimacy to adopt legislation that compels industries and individuals to act sustainably. in addressing climate risks, there are also areas where central banks can and should contribute. climate change is already affecting our economies and thus price and financial stability, which lie at the heart of central banks ’ mandates. this urges us to take climate - related considerations into account in the conduct of monetary and eventually macroprudential policies, and in the supervision of banks. in july last year, the eurosystem central banks concretised our commitments and adopted a roadmap on climate - related actions. regarding monetary policy, we agreed to analyse the inclusion of climate - related factors in macroeconomic modelling and in the implementation of our monetary policy, more specifically the collateral framework and corporate asset purchases. regarding our own investments that are not related to monetary policy, banka slovenije is increasing its share of green and other sustainable bonds. we also abstain from investing in firms in the tobacco and arms industries, and firms causing major environmental harm. we plan to further enhance our socially responsible investment framework by setting targets that are even more ambitious. next year we will start measuring and reporting carbon footprints,

and other indicators of socially responsible and sustainable investing. regarding the banking system, the task of central banks is to set unified standards for addressing climate - related risks by adapting banking regulations and supervisory frameworks. related to banking supervision, our activities embrace the measurement, assessment, management and disclosure of climate risks. in 2020 the ecb issued a guide for banks with details of the supervisory expectations in this regard. the self - assessment of systemically important banks against these supervisory expectations shows considerable initial gaps exist, which is not surprising as we are still setting the groundwork in the field. we are aware of several challenges along the road, such as the limited availability and quality of climate - related data. banks should thus keep working on the systematic identification and measurement of exposure to climate risks, and integrate climate - related considerations in their business strategies and key policies, including lending policies. this year the ecb and national central banks are conducting the first climate risk stress tests. this is a learning exercise for all of us involved. it will provide us with a better insight into the banks ’ capabilities and challenges related to climate risk stress testing, and the resilience of banks to these risks. the results of the exercise, which will take a qualitative form, will become an integral part of the supervisory review and evaluation process ( srep ). this means that this stress test could indirectly impact pillar 2 capital requirements. for commercial banks and the broader financial system, addressing climate change also brings opportunities. the transition to a greener society demands substantial investments, and the financial sector, especially banks, will have a key role in providing the financial resources needed to achieve this. [ conclusion ] dear ladies and gentlemen, in recent crises we have shown that together we can cope well with unprecedented challenges. what lies ahead of us is a mix of several challenges, cyclical and structural, intertwined among themselves. by acting together, as we have done in recent years, we will manage and take advantage of them. what we have learnt is that strengthening the resilience of the banking sectors pays off, as evidenced by the solid position of european banks during the recent crisis, built as a result of the strengthening of the regulatory and supervisory framework over the last decade. financial institutions that are sufficiently resilient to looming risks will be able to adequately support the economy and individuals in these demanding times, and play a key role in supporting the green transition. i wish you interesting discussions after anniversary. congratulations! the event, and a