the fragility of nature, and which are the likely targets of policies aimed at restoring it. investments in such companies create transition risks, and make the financial sector part of the problem. but it is does not have to be this way. financial institutions are the enablers of economy activity. they have the power, through capital allocation, to guide financial flows away from activities that hurt nature. the question is : how can and will we make sure that we – the broad financial system, from public to private actors – become part of the solution? studies by the world bank, the central banks of the netherlands, france, malaysia and mexico and others, and the study by the network for greening the financial system – that is our partnership of 116 central banks and international organisations – recently concluded that biodiversity loss is a source of financial risks and could affect financial stability. creating awareness, that is step one. g p the second step is the need to understand the problem. several central banks and supervisors are working on quantifying the problem : measuring the value of natural capital, understanding its relation to economic growth, providing assessments of financial vulnerabilities and building scenarios to create a much needed perspective.. better disclosures are at the heart of those efforts. after all, information provided by corporate and financial institutions is a key ingredient for better analyses and decision - making. governments and standard setters have to take a leading role by implementing, improving and harmonising disclosure requirements. of equal importance are market - led initiatives like the work that is currently being done by the taskforce on nature - related disclosures ( tnfd ) these two steps represent what we excel at : collecting and interpreting data. but we have to make sure that our quest for better data does not result in delays. because it is time – high time – for the third step : to actually take action and use the data at our disposal, to change the way we do things, to restore the balance between nature and economy. as the nitrogen crisis and last year ’ s floods in the netherlands show, the loss of biodiversity is not merely a challenge for future generations. timely action is needed to ensure that we bend the curve in time. actions to stop the degradation of nature in the short term actions to move swiftly to an economy that helps to restore nature. this is why i am thrilled that the ngfs does not only acknowledge the relevance of naturerelated risks, but also established a taskforce to make sure these risks are

plans of vulnerable countries must be corrected swiftly by structural fiscal improvements. with regard to the new provisions of the eu economic governance framework that recently came into force, it is crucial that all the elements be implemented rigorously. only ambitious policies to prevent and correct macroeconomic and fiscal imbalances will foster public confidence in the soundness of policy actions, and thus strengthen overall economic sentiment. the governing council welcomes the european council ’ s agreement to move to a stronger economic union, which was announced on 9 december 2011. the new fiscal compact, bis central bankers ’ speeches comprising a fundamental restatement of the fiscal rules together with the fiscal commitments that euro area governments have made, is an important contribution to ensuring the long - run sustainability of public finances in the euro area countries. the wording of the rules needs to be unambiguous and effective. the further development of the european financial stability tools should make the operation of the european financial stability facility and the european stability mechanism more effective. the swift deployment of these tools is now urgently needed. concerning the involvement of the private sector in financial assistance for indebted countries, we welcome the reaffirmation that the decisions taken on 21 july and 26 and 27 october 2011 concerning greek debt are unique and exceptional. to accompany fiscal consolidation, the governing council calls for the urgent implementation of bold and ambitious structural reforms. going hand in hand, fiscal consolidation and structural reforms would strengthen confidence, growth prospects and job creation. key reforms should be rapidly carried out to help the euro area countries to improve competitiveness, increase the flexibility of their economies and enhance their longer - term growth potential. product market reforms should focus on fully opening up markets to increased competition. labour market reforms should focus on removing rigidities and enhancing wage flexibility. we are now at your disposal for questions. bis central bankers ’ speeches