sabine mauderer : us senate democrats ’ special committee on the climate crisis opening remarks by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the meeting, washington dc, 17 october 2019. * * * chairman schatz, members of the committee : thank you for inviting me to this important meeting with central bankers. the bundesbank is a proud founding member of the ngfs, the central banks and supervisors network for greening the financial system. the work being done by the ngfs demonstrates that combating climate change is a key factor for the financial system. climate change can have long - term impacts on economic structures and activities, productivity and other key macro variables, such as prices. even if mitigation strategies are put in place, societies and economies are likely to face increasing climate change - related disruptions and supply - side shocks. apart from climate change itself, policy responses will affect macroeconomic activities as well, with implications for the financial system. we therefore look at climate change as a source of financial risk, both from the micro - and the macroprudential perspective. the u. s. senate democrats ’ special committee on the climate crisis also made this strong point in its letter to the fed. as frank elderson from de nederlandsche bank has already covered the banking supervisory perspective, i would like to focus on financial stability. from a financial stability perspective, the bundesbank has a clear mandate to take into account a potentially systemic impact of climate - related risks on the financial system. in this regard, we need a sound understanding of how physical and transition risks arising from climate change affect financial stability. to achieve this understanding, we need more data on individual and systemic climate risk exposures, prudent methods of measuring vulnerabilities to climate risks, and analytical frameworks with longer horizons. at present it is not entirely clear to what extent market participants adequately price climate - related risks. if the general market assessment changes, for example as a result of a natural disaster or unexpectedly drastic policy measures, this could have a significant impact on market dynamics. if many market participants sell at the same time, this could rapidly drive down the prices of affected assets, with spill - overs to other financial market segments. the result could be a broad decline in asset prices, with repercussions for the entire financial system. while such a chain reaction cannot be ruled out entirely, its probability and impact are difficult to estimate.

” ( not in education, employment, or training ) to well above the european average. but public investment in education does not mean simply providing more financial resources to schools and universities. quality spending is needed to improve these infrastructures, because we need schools that are not only endowed with up - to - date ict tools, but are also sufficiently attractive and comfortable : students should be able to enjoy and fully benefit from their time in attending them. in addition, a far - reaching reflection is needed on both what is taught in schools and on how it is taught. with regard to the content of education, many observers place a greater emphasis on “ creative ” subjects. it is now widely recognised that a modern school curriculum should integrate science, technology, engineering and mathematics ( known with the traditional acronym stem ) with the arts ( steam ) as well as reading and writing ( stream ). in fact, when most routine and data - driven tasks are automated, human contribution will be concentrated in those creative tasks aimed at developing new goods and services or at customising or differentiating existing ones. these tasks require us to understand and anticipate consumer needs and behaviours, to improve the design of new products and to analyse their integration into every - day life. importance should also be given to financial education, including its digital facets. new technologies in the financial industry are introducing novel products, services and providers. but the growing digitalisation of financial decisions is not always accompanied by an increase in financial literacy levels, even among the younger population. for instance, for italy, our survey – conducted within the group of twenty ( g20 ) using a methodology developed by the oecd – shows a very low level of financial literacy with respect to the g20 average, especially among the least educated respondents, the elderly and women ; only about 30 per cent of all the respondents showed sufficient financial knowledge, versus a still low 48 per cent, on average, for the g20. enhancing financial education, as well as familiarity with digital tools, is needed to raise awareness in the use of digital financial services and help protect customers from digital crimes, such as phishing scams, account hacking and data theft. it is also worth remembering that new technologies are leading to a growing digital footprint of consumers and entrepreneurs. not only financial service providers but also online retailers, social network platforms, and other internet service providers gather vast amounts of personal information. these data are often used as input for algorithms that profile customers and can draw behaviour