climate uncertainties ” ). climate and econometric models that integrate different climate scenarios and their potential economic impacts to assess these risks are being developed and refined, but measuring the economic costs of climate change ( and of climate policies ) is a work in progress. we can assess the immediate costs of more frequent and intense natural disasters, but most of the potential costs lie beyond the typical horizon of economic and financial analyses. climate change risks can unfold through the economy, especially if the transition to net zero emissions proves poorly designed or hard to coordinate globally, with ensuing disruptions to international trade. financial stability concerns arise when asset prices adjust too quickly, reflecting unforeseeable realisations of transition or physical risks. however, it is unclear how much today ’ s asset prices reflect the extent of the policy actions required to limit global warming to [UNK] or their impact on the economy and the financial system. a major challenge for financial investors is then how to align the incentives to channel 1 / 2 bis central bankers'speeches entrepreneurship towards productive and beneficial activities such as technological innovation and, at the same time, prevent unproductive destructive activities that damage the environment. this is why we believe that interacting with start - ups and fintech in such endeavour could be very useful, and why we are today in milan where our financial innovation centre, the bank of italy ’ s milano hub, has recently started to operate. indeed, we are convinced that this interaction may bear considerable fruits in several areas. currently, we are looking for contributions in the field of artificial intelligence in improving the provision of banking, financial and payment services to businesses, households and the public administration. the proposals should focus on financial inclusion, sound consumer protection, and data security. to conclude, this techsprint seems to me a well - designed contribution to foster innovation in an area, such as the fight against climate change, where both data and methodological gaps prevent accurate and sound data - driven solutions. it attempts to spur the public and private sector to identify profitable cooperative solutions aimed at achieving sustainable development goals. winners should go well beyond the prizes, towards the pursuit of reliable and sound solutions for sustaining the development of a solid green finance market. and we encourage all finalists to continue to refine their proposals, because financial authorities and market players avidly await new technological solutions to bridge the present informational gaps. if fostering interaction and competition among companies is important in normal times, it is even more so in times when problems are more

rate even further ( see figure 3 ). over the past year, we have also lowered the forecast path for the repo rate. this has been necessary to meet the inflation target and support economic activity. but in our monetary policy we have also given some consideration to household debt and housing prices – and for good reason, in my opinion. let me explain this in more detail. … as there are considerable risks the financial crisis has made the risks linked to the housing market and high household debt crystal clear. the most well - known examples are the united states, ireland and spain. but denmark, too, has experienced problems in its housing market ( see figure 4 ). in sweden, house prices have risen substantially since the middle of the 1990s, even compared with the countries where prices have since plummeted ( see figure 4 ). as house purchases are to a great extent funded by borrowed money, it is hardly surprising that this has also entailed a large increase in household debt ( see figure 5 ). i think that it is important in this context to try to clarify the actual risks for sweden here. it is not very likely that a fall in house prices would lead to extensive loan losses from mortgages for banks and mortgage institutions. both the experiences from the 1990s and the analyses bis central bankers ’ speeches we have made ourselves point to this not being the case. 1 however, a fall in house prices can give rise to other effects, direct and indirect, on both the macro economy and financial stability. the most direct effects for the macro economy concern household consumption. experiences show that the countries hit by severe falls in house prices usually experience long periods of very weak consumption. this is because households then tend to increase their savings to restore their wealth. figure 6 shows developments in household consumption and real house prices in different countries. we can see that sweden has had a much stronger growth in consumption than the countries affected by severe falls in house prices. weaker consumption demand has direct effects on growth, and thus also on unemployment ( see figure 7 ). this in turn has indirect effects on financial stability in that the banks ’ loan losses in the corporate sector may increase as a result of the poorer economic activity. another aspect that can affect financial stability is that an increasingly large share of the banks ’ funding is through foreign investors ( see figure 8 ). confidence among foreign investors may be affected substantially by a fall in house prices. this could have direct effects on financial stability in that the banks have greater difficulty obtaining