– as households and businesses face into these headwinds. as such, this is not a time for complacency. both regulators and the sector must remain vigilant – and continue to safeguard resilience. in this regard, last week we confirmed that from june 2024 the countercyclical capital buffer ( ccyb ) rate would be increased to 1. 5 %. 3 this is in line with the gradual build - up announced last year and our macro prudential strategy of a neutral ccyb of one and a half per cent, when cyclical risks are neither elevated nor subdued. should risks materialise we will not hesitate to partially or fully release the ccyb to maintain the supply of lending to the economy – as we have done so before. in these challenging times, many of your customers will be facing difficulties in dealing with rising prices. it is at moments like these that the responsibility of financial service providers to their customers is at its most important. and so as you consider the passing on of central bank interest rate changes to your customers, it is essential that their interests are at the heart of your decision making and the approach you adopt. the horizon closing in turning to the topic at hand, while short - term uncertainty and risks naturally occupy our minds, it is crucial we don ’ t lose sight of other more structural challenges – in particular such a profound and fundamental one as climate change. it has been nearly eight years since mark carney ’ s “ tragedy of the horizon ” speech. 4 while a lot of other things have happened in the intervening years, since then climate and environmental risk for the financial sector has gone from a concept being debated to something that is part of many regulatory and supervisory conversations. this is a credit to both the financial sector and regulators. but while the progress in seeking to address climate change through financial regulation and supervision has in some ways been swift, keeping pace with the implications of climate change has proven a challenge. last year i addressed climate week5 and spoke of the urgency of the climate challenge – and how the window for meaningful action on climate change is closing. with every passing month further stark news emerges to renew that call : a recent wmo6 report warns we are getting closer and closer to breaching the 1. 5 - degree threshold set out by the paris agreement – with global mean temperatures predicted to continue increasing, moving us further and further away from the climate we are used to. furthermore, the journal nature has

temperatures set to reach new records in next five years 7 the earth commission a just world on a safe planet : first study quantifying earth system boundaries live 8 taking biodiversity alone, recent ecb analysis found that almost 75 per cent of bank loans to companies in the euro area are granted to companies with a high dependency on at least one ecosystem service – see frank elderson the economy and banks need nature to survive, 8 june 2021 9 see ecb banking supervision good practices for climate related and environmental risk management - observations from the 2022 thematic review 10 ecb banking supervision 2022 climate risk stress test 11 ecb banking supervision walking the talk banks gearing up to manage risks from climate change and environmental degradation 12 ecb banking supervision guide on climate - related and environmental risks : supervisory expectations relating to risk management and disclosure 13 government of ireland climate action plan 2023 14 eba progress report on greenwashing monitoring and supervision see consumer protection code review discussion paper 16 central bank of ireland strategy 17 central bank of ireland climate action roadmap 18 see central bank of ireland ’ s climate - related financial disclosures 2023 ©2023 central bank of ireland