). increasing access to finance in this sector is among the eu priorities. it is also true that this portfolio accounted for the highest post - crisis npl ratio in the european union. at its peak, the average npl ratio for small and medium enterprises reached around 20 percent at european union level. in romania, the ratio was 35 percent, while the npl ratio for microenterprises accounted for 53 percent. therefore, the same lesson learnt from the household sector also applies here : the small and medium enterpises ’ financial inclusion should unfold in a sustainable way. on the other hand, the experience with macroprudential instruments for companies is extremely limited at the european level. for example, france has recently implemented a measure focusing on highly indebted firms, but it applies only to large companies. therefore, i think that deepening this area of research is very useful for macroprudential policymakers. in romania we have also tried to come up with solutions that might improve small and medium enterprises ’ financial inclusion. our macroprudential authority – the national committee for macroprudential oversight, comprising representatives from the central bank, the ministry of public finance, and the financial supervisory authority – adopted last year a recommendation to the government, seeking to improve financial discipline in the economy and the financial soundness of firms. i strongly believe that addressing these structural vulnerabilities in the corporate sector will significantly increase the number of bankable firms and enhance the financial inclusion of small and medium enterprises. last, but not least, the climate - related topics have become more and more prominent worldwide. the financial system should not ignore the effects of climate risks. central banks and supervisory authorities have joined the scene. there is a significant interest at eu level in the role of sustainable finance, a high - level expert group on sustainable finance being established by the union. the network for greening the financial system, that brings together 34 members, out of which 8 are central banks and supervisory authorities, highlighted the role of climate risks as a source of financial vulnerabilities. not only the increased frequency and severity of extreme weather can translate into economic and financial losses for the real economy and the financial system, but consequences can also arise from transitioning to a low - carbon economy. governments ’ climate policy, new technologies and consumer preferences will be the main drivers influencing the developments in carbon - intensive sectors. having in mind the important ramifications, a coherent policy mix is needed in order to

mugur isarescu : recent developments in central bank governance panel presentation by mr mugur isarescu, governor of the national bank of romania, at the " central bank and supervisory governance " conference, organized by the national bank of the netherlands, amsterdam, 12 february 2016. * * * ladies and gentlemen, it is a great honour to address the audience during this high - level conference on a subject of special interest to all of us, the recent developments in central bank governance leading to heated debates every time they are brought to the fore. mr. he has done a wonderful job in structuring the challenges of nowadays ’ central banking and in outlining the importance of effective governance arrangements in order to meet these challenges – his presentation is a testimony to imf ’ s unique ability to draw upon a vast set of worldwide institutional experiences. i, in turn, will draw mainly upon a narrower, but hopefully no less relevant, set of institutional experiences, gathered during my tenure as governor of the national bank of romania. in my address today i intend to deal with the issue of recent developments in central bank governance by looking at : 1. the central bank objectives as the starting point in designing its governance framework ; 2. how the nbr dealt with the financial stability as an objective, from an institutional point of view ; integrating or separating monetary policy and supervision ; 3. a short history of institutional developments within the nbr for ensuring financial stability ; 4. the internal control layers in the nbr ; 5. pros and cons of different institutional alternatives : banking supervision and macroprudential authority – inside or outside the central bank ; 6. a historical perspective on the experience of becoming a modern central bank, a process undergone not only by the nbr. 1. defining the objectives – the starting point in designing central bank governance it goes without saying that ground zero in building the central bank governance framework is clarifying the objectives it has to pursue. for quite a long time, at least in europe, “ price stability ” enjoyed the position of overriding objective, but since the outbreak of the crisis it became obvious that the “ inflation first ” approach may turn counterproductive in an environment of financial instability. therefore, financial stability concerns made their way up on central bankers ’ agenda. is that really a novelty? as the representative of an emerging economy central bank that never had the luxury of being concerned exclusively with price stability, i dare say it is not. actually, central banking has always been