banks have developed implementation plans, and many have started to progressively improve their practices. there are some areas where banks have made substantial progress. for instance, roughly half of them have started to integrate climate risks into their client due diligence. they have developed dedicated client questionnaires to better understand the climate risks to which they are exposed, and they use this information when deciding to whom they grant credit. in addition, roughly half of banks are now integrating climate risks into their lending policies, sometimes requiring that a specialised climate - related risk function advises them on higher - risk transactions. what is remarkable is that the progress we are seeing on all these fronts was identified in banks from different countries, with different business models and different asset volumes. some banks have also been proactively trying to overcome the scarcity of climate - related data by independently developing their own indicators – such as financed carbon emissions, financed technology mix and energy performance certificates – to identify corporate clients with high sensitivity to climate transition risks. they have then set limits at portfolio level to manage those risks. and one bank has developed a climate risk dashboard to present to its board ’ s risk committee on a quarterly basis. this shows that data scarcity can be overcome. finally, some banks have already started to identify and manage other environmental risks beyond climate, such as those associated with biodiversity loss and pollution. for instance, one bank has started to develop a methodology to measure the biodiversity footprint of its investment and lending portfolios, while others have developed a dedicated group policy regarding their commitments and lending criteria related to biodiversity risks. in our guide, we recognise that other environmental factors related to the loss of ecosystem services, such as water stress, biodiversity loss and resource scarcity, have also been shown to drive financial risk. and we therefore expect banks to evaluate all environmental risk - related information, beyond climate risks, to ensure that their risk profile is sufficiently covered against them. 4 these practices are proof that, contrary to some of the industry ’ s claims, what the ecb is asking is not unreasonable or impossible. some banks have effectively raised the bar, and those lagging behind should take inspiration from them and follow suit. conclusion to conclude. for all their many flaws, national accounts data continue to be extremely useful for policymaking to this day. they have been extensively reviewed and gradually harmonised – the same path we should expect for climate data and the architecture supporting them. no, climate data are not harmonised yet. and yes, they are

a decline in longer - term interest rates and risk premiums through both the interest rate channel and the portfolio channel. the declines would influence firms ’ borrowing costs, a range of asset prices including stock prices and foreign exchange rates, and bank lending, thereby influencing households ’ and firms ’ spending and eventually have positive effects on economic activity and prices. looking at the developments following the february decision based on this consideration – in the form of effects on longer - term interest rates and people ’ s risk - taking appetite brought about by prospects, that is, valid expectations for future aggressive monetary policy conduct – the 2 - year government bond yield has declined, the yen has depreciated, and stock prices have risen. the depreciating trend of the yen and the rise in stock prices were already evident prior to the february decision, reflecting the mitigation of global risk aversion, improvement in the u. s. economy, and japan ’ s trade deficit. the decision at the monetary policy meeting in february also appears to have contributed to establishing the trend. the clarification of the bank ’ s powerful monetary easing stance and decisive policy action seem to have exerted a strong commitment effect and a policy duration effect. these spilled over and lowered longer - term interest rates – including the 5 - year government bond yield – enhanced people ’ s risk - taking appetite – lowering required risk premiums in turn – and thereby enhanced the effects to improve financial conditions. i pointed out earlier that firms ’ investment spending might have been restrained due to sluggish stock prices, the appreciation of the yen, and the slowdown in the global economy. if the current improving trend in financial conditions continues in tandem with the improvement in overseas economies, these improvements could induce a favorable turn in bis central bankers ’ speeches corporate profits and business sentiment, increase forward - looking investment, and concurrently enhance growth potential and value creativity. the depreciation of the yen and the rise in stock prices might also lead to an improvement in consumer sentiment and an increase in tourists from abroad, thereby further stimulating domestic demand. such developments would likely work to induce a sustainable economic recovery and a moderate rise in prices. as cautious views remain with regard to future uncertainties, the headwind japan ’ s economy faces is likely to continue. nevertheless, what i have just discussed suggests one channel through which powerful monetary easing could lead to overcoming deflation. if the path of improvement induced by powerful monetary easing can be forecast and grasped by market participants, the improvement