’ s increasing demand, a hype, or new market opportunities and instruments, there ’ s the risk of creating a new bubble. while we are still far away from a green bubble, institutions do tell us that green projects have become more and more expensive, as competition has increased with more and more institutions essentially bidding for the same projects. a second risk we see is green washing. do investors and consumers know what green is, when they ’ re buying green? there are examples of a green bond being used to make a coal plant more sustainable. in itself, there is nothing wrong with that, or at least that ’ s not for us to say, but what is important is that purchasers of these bonds should be aware of this. here, too, the work of the european commission on a sustainable taxonomy as well as on standards for green bonds, will be most welcome. lastly, we are seeing an increased lobbying effort to lower capital requirements to stimulate green investments. andreas has already touched upon this, so i won ’ t repeat that, other than that we wholeheartedly agree : capital requirements should remain risk based. we are thus quite skeptical of the expected plans of the european commission in relation to prudential requirements, even though they also acknowledge the risk based nature of capital requirements. iii. supervision : implications for bank risk management and supervision so let me end with what this all means for bank risk management and supervision. the main conclusion is that banks, including those present today, will need to manage material climaterelated risks. and that supervisors will need to supervise this. this is of course easier said than done. if anyone in this room already knows how to exactly manage climate - related risks, please join us at the podium in a minute! two things are important to keep in mind here. one : incorporating climate risks is greatly facilitated when governments impose clear and long term transition legislation, which gives banks the ability to steer towards a set of well - defined goals. this is exactly what we are seeing with the energy efficiency requirements of dutch offices. two, for many parts of our economies, unfortunately there is not yet any clear legislation that allows banks to anticipate such a set of well - defined goals. in those cases, banks would still do well to try and gauge how their business models and which parts of their balance sheets would be most strongly affected by the transition and which type of legislation or technological change might be expected in those sectors. it would then be prudent

are appropriate and efficient. that is particularly true if the planned enlargement of the eu, and also of emu, is taken into account. there is a lot of evidence suggesting that the latest amendment of the ec treaty by the treaty of amsterdam ( known as the maastricht ii treaty ) has failed to solve these major problems. all this makes two things very clear : 1. the launch of the euro is a political act, and far more than a mere technical development. it has substantial implications for economic and political structures and responsibilities in europe. 2. the stability of the euro is a major challenge not only to the eurosystem but likewise to the economic and fiscal policies of member states and to the coordination of those policies. to sum up, i should like to emphasise once again that, all in all, the euro has got off to a good start, also in the light of the counterinflationary policy setting. but the acid test still lies ahead. the major opportunities afforded by the euro are accompanied by corresponding risks and challenges. the fate of the euro in the years ahead will hinge crucially on whether member states become aware of this task, and on how they address it. this issue will certainly also play a major role in the forthcoming debates in the uk and other countries on joining the eurosystem. i very much hope that the behaviour of the euro member states will make it easier for the nations and governments in question to reach a favourable decision.