the growing concern about the effects of climate change, but it may also reflect a lower underlying risk. in any event, this change in attitude by investors should also serve as a catalyst for change towards more sustainable activities. taxonomy i should, however, also mention a general problem that may be holding these markets back. although the establishment of various green principles, such as the gbp, facilitated the launch of the green bond market, the lack of a commonly accepted taxonomy4 could be hampering its subsequent development. a shared taxonomy is essential to be able to make a coherent analysis of the green / brown bond yield spread. it is also important for the supervisor, as it permits aggregate risk and default analysis, consistent stress testing and the development of macroeconomic models, all of which are required to assess medium and long - term effects on the economy. lastly, a common taxonomy is needed to provide clear and consistent information to investors and the general public, as will be required of all listed companies in the future spanish legislation on environmental transition. in this setting, the european commission ’ s action plan, presented in march 2018, is crucial. the plan includes three sustainable finance regulations, including one on the creation of a “ common taxonomy ”. i trust this regulation will be approved shortly, in accordance with the objectives set by the new european commission, and that this taxonomy will finally provide us with a common definition of what may be considered “ environmental ” or “ sustainable ”. the role of supervisors – external initiatives as supervisors, we clearly have responsibility for urging on these changes. we need to be proactive ; in particular, we need to enter into a dialogue with banks to analyse how they are incorporating environmental risk. at the banco de espana we are intent on pressing ahead with this dialogue. let me mention just a few examples of recent steps taken. to assess the level of preparation for environmental risk, we conducted a survey among the 12 banks directly supervised by the ssm and several other smaller banks. subsequently we discussed the survey findings with the participating banks, conveying to them the importance of this issue and the supervisory expectations. according to the survey findings, many banks that were already explicitly considering environmental risk have included it in their social responsibility areas. almost all have a team dedicated exclusively to sustainable finance and some also indicate that they have established specific committees, reporting in some cases to the area general manager or corporate secretary and in others directly to the board of directors. in general, the green bond principles are updated once

, the board has been seeking to balance the benefits of stimulatory monetary policy with the medium - term risks associated with high and rising levels of household debt. the current low level of interest rates is helping the australian economy. it is supporting employment growth and a return of inflation to around its average level. encouragingly, growth in the number of australians with jobs has picked up over recent months and the unemployment rate has come down a bit. the investment outlook has also brightened. inflation has troughed and it is likely to increase gradually over the next couple of years. these are positive developments. even so, it will be some time before we are at what could be considered full employment in australia and before underlying inflation is at the mid - point of the medium - term target range. this means that stimulatory monetary policy continues to be appropriate. the board has been conscious that attempting to achieve faster progress on unemployment and inflation through yet lower interest rates would have added to the risks in household balance sheets. lower rates would have encouraged faster growth in household borrowing and added to the medium - term risks facing the economy. our judgement has been that it was not in the public 1 / 4 bis central bankers'speeches interest to encourage an already highly indebted household sector to borrow even more. more borrowing might have helped today, but it could come at a future cost. so the board has been prepared to be patient and has not sought to overly engineer or fine - tune things. in our view, the balance we have struck is appropriate and it is likely that the economy will pick up from here as the drag from declining mining investment comes to an end. our central scenario is for growth of around 3 per cent over the next couple of years and for the unemployment rate to move lower gradually. in striking the appropriate balance in our policy setting, we have paid close attention to trends in household borrowing, given the already high levels of debt. over the past four years, household borrowing has increased at an average rate of 6½ per cent, while household income has increased at an average rate of just 3½ per cent. given this, the rba has worked closely with apra to ensure that lending practices remain sound. rightly, apra has had a strong focus on loan serviceability calculations. in some cases, loans were being made where the borrower had only the slimmest of spare income. apra has also introduced restrictions on growth of investor loans and restrictions on interest - only lending