yannis stournaras : climate crisis - action in central banking keynote speech by mr yannis stournaras, governor of the bank of greece, at the cop26 eu side event, 4 november 2021. * * * it is a great pleasure to be here with you and share my thoughts on addressing the climate crisis, οne of the world ’ s top threats to humanity according to the united nations, while also harnessing the opportunity this presents to the economy. from a central banker ’ s perspective, this challenge translates into concrete opportunities, such as rebooting the economy, increasing financial integration and stability in the eu through green finance, advancing the creation of the capital markets union ( cmu ) and fostering a green cmu. let me elaborate. rebooting the economy. the global policy response to the covid - 19 crisis presents an excellent opportunity to adopt a coordinated approach to tackling climate change — to re - design a more inclusive, sustainable and carbon neutral development pathway, aligned with the un agenda, the sustainable development goals, the paris agreement and our duty towards the next generations. climate policies toward net zero emissions, climate adaptation and resilient infrastructures can all be pursued as the world recovers from the pandemic, in a manner that supports economic growth, employment and income equality. over the next years, the world will invest heavily to recover from the fallout of covid - 19. along these lines, the next generation eu programme has already assigned 30 % of the funds on fighting climate change, in addition to the resources made available in the framework of eu cohesion policy. these initiatives should become sustainable features of our response to climate change. what we decide today will help determine the future of our societies. strengthening financial integration. encouraging green finance is an excellent way to strengthen financial integration. the transition to a carbon neutral economy will require adequate green financing. for example, the achievement of european climate and energy targets will require an estimated €330 billion annually by 2030. financial integration across euro area countries will generate investment opportunities and diversification of financial risks across national borders. currently, green bonds are more likely to be held cross border than other european bonds ; environmental, social and governance ( esg ) funds appear more stable, as investors are less likely to withdraw funds following negative performance than investors in other types of funds ; and there is evidence to suggest that equity funding could help incentivize green innovation and greener activities. in short,

a - vis both the markets and our creditors as a result of last year ’ s delays ( 2 elections in just 9 months, a referendum, the country coming to the verge of grexit ) which led to the signing of the 3rd memorandum, can only be overcome, at this point, with deeds and tangible proof that agreements are kept in greece : i. e. that fiscal adjustment measures and reforms are implemented, and privatisations are accelerated. pacta sunt servanda, as the latins say. third remark : a question i am often asked in athens, as you might suspect, is whether i am optimistic about the country ’ s economic prospects. mark twain said something along the lines : the man who is a pessimist before 50 knows too much ; he is wise man ; if he is an optimist after 50, he simply needs to visit a gp! so my answer to those who asked me whether i am optimistic is that if there is a timely conclusion of the first review, i see the glass half - full for bis central bankers ’ speeches the following reasons : in the short - term, immediately, confidence will be drastically restored, thus accelerating a return of deposits to the greek banking system and this will, in turn, lead to a further relaxing of capital controls and, once again immediately, lead to greek government bonds being readmitted as eligible collateral for eurosystem operations, under the so - called ‘ waiver ’. such a development will allow the provision of much cheaper financing for greek banks by the ecb, hence boosting liquidity provided to the real sector of the economy. furthermore, the successful conclusion of the first review will be immediately followed by a start in negotiations with our creditors for public debt relief, and improvements in credit ratings for greek government bonds and, in the end, our participation in the quantitative easing programme of the ecb, something which will become a catalyst for the drastic reduction in greece ’ s borrowing costs, a return to international capital markets and finally a return to european normality for my country. thank you very much for your attention. bis central bankers ’ speeches