affect our economy and society. however, the cost of addressing these changes is but a fraction of the cost that we would have to pay, if we allow climate change to continue unabated, without taking any preventive action. at the same time, considering that the occurrence of extreme climate events in the future cannot be excluded, policies for mitigation and adaptation should be viewed as contingency measures against such an eventuality and, as such, are advisable irrespective of the results of the cost - benefit analysis. at first glance, the current adverse economic conjuncture appears to constrain the financing of mitigation and adaptation policies. to the extent, however, that these policies can be exploited as an opportunity for new lines of economic activity and for growth, they can be part of the strategy for an exit from the crisis. in other words, the adoption of mitigation and adaptation policies, although appearing to be hampered by the grave economic problem faced by greece today, can in fact contribute to its solution. the study not only demonstrated the need for action to deal with climate change, it also underscored the need to pursue research further. in this light, we, at the bank of greece, bis central bankers ’ speeches intend to continue with the effort of both disseminating information and contributing to research. the extremely useful study presented here today therefore marks only the starting point, the first step of an ongoing effort, which will be enriched and expanded as it proceeds. the time horizon set in this study extends well beyond the current adverse conjuncture and illustrates how firmly we believe in the future of our economy, as well as in the need to address its problems seriously. i consider that a happy outcome of our initiative is that it has offered an opportunity for cooperation to experts from different scientific disciplines, who for the first time joined forces in the study of such a complex problem. this constitutes a very positive example for the greek scientific community. in closing, allow me one final word. despite my opening remarks, some may still wonder why the bank of greece, at a time like this, should concern itself with climate change anyway. my answer to them is that the publication of a report analysing the impact of climate change on the greek economy and outlining policy measures to deal with it over the next ninety years is also a clear - cut response to the outrageous and ridiculous scenarios recently going around. let me point out that all of the estimates in

is managed in an orderly way. can crises be avoided with different fiscal and monetary policies? as the european drama has unfolded, many observers have asked how we can prevent similar crises from occurring in the future. when, like me, you come from a central bank, it is natural to ask whether a different monetary policy had been able to prevent the crisis. some analysts have identified the low interest rates that prevailed in many countries, and above all in the united states, for some years before the crisis as an important cause of unsustainable increases in indebtedness and property prices. before the crisis, the most common view among central bankers was that monetary policy should only react to sharp increases in indebtedness and asset prices if these could be expected to lead to overheating in the economy as a whole and thus to a too high rate of inflation. otherwise, the central bank should wait - and - see before adjusting monetary policy, but be prepared to quickly cut the policy rate if a burst asset - price bubble initiates a dramatic fall in demand in the economy. however, this view has been called into question recently. many observers, including myself in one of my first speeches as a member of the executive board, have asked themselves whether monetary policy shouldn ’ t also be used to counteract the development of bubbles. 4 would it have been possible, for example, to prevent this financial crisis if monetary policy had been tighter in the united states in the years leading up to 2007, when the problems on the us financial market began? as can be seen in figure 1, the actual real policy rate was relatively low in this period. however, it is doubtful whether a higher policy rate would have been able to bring growth in property prices and credit to a more moderate pace in the united states without driving the economy into a recession at the same time. 5 see for instance bis ( 2012 ) : european bank funding and deleveraging, bis quarterly review, march 2012. eba ( 2011 ) : eba recommendation on the creation and supervisory oversight of temporary capital buffers to restore market confidence ( eba / rec / 2011 / 1 ) ekholm ( 2009 ) : some lessons for monetary policy from the financial crisis, speech held on 4 december 2009. see for example bernanke ( 2010 ) : monetary policy and the housing bubble, speech held on 3 january, 2010, and dokko, doyle, kiley, kim, sherlund, sim and van der heuve