now improved considerably. almost all banks see climate - related and environmental risks as material financial risks and are adjusting their risk management step by step. [ 9 ] for this the banks are dependent on information from their customers – the forthcoming application of corporate sustainability reporting will provide banks with more reliable and comparable data. that ’ s good news – but a great deal more work lies ahead. banks need, for example, to further integrate climate - related and environmental risks into their strategic planning and stress tests. if they don ’ t meet our supervisory expectations, [ 11 ] we can take applicable measures, for example by requiring better risk management or higher capital. good risk management at banks and strong banking supervision thus support climate and environmental policy – but they are not a substitute for it. they are important components in the way our society deals with climate - related and environmental risks. today ’ s event is about working together for climate neutrality ( “ zusammen fur klimaneutralitat ” ). for me, this means that : we have a strong consensus in our society on climate - related and environmental objectives. over the next two decades, we want to move step by step to climate neutrality. there are many ways to reach this goal. adjustments in the relative prices of carbon dioxide are an important tool for making it more expensive to act in ways that harm the climate. but regulatory measures and social policies are also needed to ensure that vulnerable groups are not burdened more than necessary by changes in relative prices for co2. the best combination of these measures must be discussed across society and then decided at the political level. these decisions on climate and environmental policy form the basis for our work. banking supervision and regulation do not have climate policy objectives. but they do establish the framework within which banks must properly measure and assess climate - related and environmental risks, and build resilience. that creates transparency and stability at a time when the climate crisis is demanding a major transformation of european economies. stable banks are a key bridge on the road to a more sustainable future. 1. in slovenia, very heavy rain last year caused damage equivalent to 16 % of gdp. in the emilia - romagna region of northern italy floods produced €9 billion of damage. see european environment agency ( 2024 ), “ european climate risk assessment ”, eea report, no 01 / 2024 ; and hancock, a. ( 2024 ), “ eu warned of rising risk of systemic financial shocks from continent warming ”, financial times

. in particular, they noted that the federal reserve serves certain market segments that may not yet have demonstrated adequate market competition, specifically, providing check and ach services to low - volume banks and providing check services to banks throughout the country that need to collect checks drawn on small, remote banks. the rivlin committee concluded that the federal reserve should continue to provide check and ach services, with the objectives of enhancing efficiency, promoting integrity, and ensuring access. given the federal reserve ’ s current dominant market position in these services and the risk of disruption if the federal reserve were to exit quickly, this conclusion makes sense. the committee also concluded that we should play a more active role, working collaboratively with providers and users of the payments system, to help evolve strategies for moving to the next generation of payment instruments. future role of the federal reserve as service provider for the longer term, will the conclusion that the federal reserve should be a provider continue to be the correct one? this question hinges in large part on the extent to which the federal reserve ’ s participation is needed to ensure the smooth functioning of the payments system that achieves the four goals i outlined earlier and whether there are significant barriers to private firms entry into the interbank check and ach markets. in other words, we need to assess whether the federal reserve ’ s operational involvement in retail payment services would foster or impede competition and progress as the market for these payment services evolves. there has been much debate regarding the extent to which check markets are “ contestable, ” or truly subject to competition, particularly those segments of the market that only the federal reserve serves. are there significant barriers to competition in these markets? if so, can they be reduced? the federal reserve ’ s market position in some segments may simply indicate that there is insufficient volume to support more than one bank presenting checks to very low - volume endpoints. if that is the case, does this suggest that a private - sector provider could fill the gap if the fed were to exit this service? if the market will only support one provider, would potential entrants provide sufficient market discipline on that provider to ensure that the terms of its service are reasonable or would regulation be required? one possible barrier to correspondent banks providing services equivalent to the federal reserve ’ s is their more limited presentment abilities. as i will discuss shortly, we are currently evaluating this issue. private - sector entry into ach appears to face different obstacles. today, the ach service exhibits