make economic sense in terms of efficiency. there is sometimes talk of “ friendshoring ”, i. e. preferentially sourcing intermediate products from countries regarded as allies. and of “ nearshoring ”, in which deliveries from nearby countries play a greater role. fundamentally overhauling supply chains would be a time - consuming and cost - intensive process. in principle, however, government intervention in international trade beyond laying down general rules requires special justification and should remain the exception. it should be borne in mind that restricting trade always entails welfare losses. these can be considerable, depending on the trading partner ’ s importance. [ 8 ] regional free trade agreements could play an important role, as they can make it easier for european enterprises to diversify their trading partners. this brings me to the second major challenge facing german industry : the change in energy supply. this may entail considerable costs, especially in the transitional period until enterprises have got to grips with the elimination of nuclear energy and russian energy sources and switched to green alternatives. 4 price competitiveness and profitability of the german economy but what scope do german enterprises have to bear these burdens? in this context, it is worth looking at two indicators : price competitiveness and profitability. price competitiveness is one of the key factors affecting germany ’ s export performance. if we compare the price competitiveness of the german economy with 27 selected industrial countries, we see a positive, longer - term development – the price competitiveness of german suppliers has exceeded its long - term average for around 12 years now ( see chart 5 ). a second important indicator of enterprises ’ resilience is their profitability, i. e. the annual result before taxes as a percentage of turnover ( see chart 6 ). earnings in the manufacturing sector are more volatile, meaning that in times of crisis, earnings fall much more sharply, but also recover more quickly afterwards. this is what happened during the financial and economic crisis as well as the coronavirus pandemic. on the whole, the profitability of german enterprises recovered remarkably rapidly in each case. before russia ’ s war of aggression against ukraine, the profitability of the economy as a whole and of the manufacturing sector climbed to a high level by historical standards. of course, the war and the associated rise in energy prices will not have left profitability unscathed ( see chart 7 ). this applies to industrial enterprises in particular. [ 9 ] gas was already more expensive in europe and in germany than

as of the financial system and the economy as a whole. this summer, ecb banking supervision ran a climate stress test that showed that many banks still have their work cut out for them when it comes to managing climate risks. 4 ngfs climate scenarios that stress test was based on a set of scenarios developed by the network for greening the financial system ( ngfs ). the ngfs is a network of more than 120 central banks and supervisors that aims to support sustainable transformation. the ngfs scenarios help quantify the economic impacts of different emission and policy pathways. the most recent update considered physical risks for the first time and took an improved look at regional and sectoral factors. the ngfs is continuing to upgrade the scenarios and their practical usability a€ “ also with a view to transition plans. the ngfs is working out how transition plans relate to supervisors'roles and mandates and how they could become part of the supervisory toolkit. 5 conclusion many aspects of transition plans are still up for discussion. the same is true for the role of supervisors when it comes to checking these plans. events like this are good opportunities to consider such fundamental questions. so let us discuss ways forward and find common ground internationally. the goal is clear : to define ambitions and to turn these ambitions into actions. 2 / 2 bis - central bankers'speeches