bonds eligible for the corporate sector purchase programme ( cspp ) at its inception. excluding these bonds would have limited the cspp ’ s coverage, making it less effective. in other words, the exclusion of these sectors would limit the tool ’ s suitability for its primary purpose of ensuring price stability. moreover, focusing purchases on green bonds would run counter to the requirement to respect the workings of an open market economy and be tantamount to industrial policy. the app is a tool for macroeconomic stabilisation, not for microeconomic reallocation. deviating from market neutrality and interfering with economic policy risks exposing the ecb to litigation. it is not up to the central bank but to elected governments to decide which industry is to be closed and when. as central bankers, we have to respect and implement legitimate decisions in this context. and the effectiveness of monetary policy has been bolstered by abstaining from normative judgments on the morality of markets and industries. of course, under the principle of market neutrality, we have also purchased green bonds. we currently hold around 24 % of eligible publicly - issued green bonds and around 20 % of private sector green bonds. in both cases, the proportion is in line with our share of holdings in the total cspp - eligible universe. beyond our primary mandate for price stability, it is worth remembering that we are not regulators, neither for financial markets nor for banks. the ecb carries out banking supervision within the single supervisory mechanism ( ssm ) under the capital requirements regulation and 4 / 6 bis central bankers'speeches directive, adopted by the council of the eu and the european parliament, with further regulations set by the european banking authority. we are not free to vary the capital requirements of supervised banks to take into account their climate risks, or to encourage climate finance. indeed, when ecb banking supervision, acting within its supervisory mandate, issued guidance on non - performing loans earlier this year, this generated tensions with regulators, who felt the guidance strayed into the territory of legislation. but we are ready to bring in our experience if so requested, in particular if it were suggested to strengthen or broaden disclosure obligations, for example. nonetheless, climate risks have been identified in ecb banking supervision ’ s risk assessment for 2019 and will be among the topics covered in the qualitative discussions held with banks on an individual basis. the ecb will continue to carry out our democratically delegated functions as set out in the treaty. should a greater

groundswell of support for environmental action cause bank regulators to modify the regulatory framework under which the ssm operates, supervisors must of course adjust their actions and implement the legal requirements accordingly. conclusion let me conclude. climate change poses the risk of considerable social costs and economic disruption. the challenges of climate change are social issues. the analysis and choice of possible solutions, including suitable instruments and their financing, require rigorous political debate. and no matter which path a society takes, the potential changes can have serious effects on sectors, regions, the distribution of income and wealth, and generations over time. economically, there will be relative winners and losers. it is therefore the responsibility of elected representatives to decide on the best solutions. central banks are explicitly excluded from such political debates. in view of the central banks ’ almost limitless financial power, politicians would come under too much temptation to use monetary policy to achieve short - term political goals, a situation that could undermine the task of preserving the purchasing power of money. that is why, in most jurisdictions, monetary policy has been transferred to technocrats who are independent of politics and are bound to fulfil a strict and unambiguous mandate to guarantee price stability. in the case of the ecb, this “ depoliticisation ” has constitutional status. at the same time, even an independent central bank does not operate in a vacuum. technological progress, innovations, geopolitical tensions and, of course, regulatory requirements by legislators influence the environment in which monetary policy operates. however, monitoring and analysing the extent to which climate change or other shocks may affect the transmission of monetary policy, the economic cycle, the soundness of individual banks and financial stability as a whole, and how they interact, is part of our forward - looking approach. 1 goethe, j. w. ( 1808 ), faust. eine tragodie. 2 goethe ( 1808 ), ibid. 3 world economic forum global risks report 2018. 4 stern report : unionsforenergydemocracy. org / wp - content / uploads / 2015 / 08 / sternreview _ report _ complete. pdf 5 noy, i ( 2009 ), “ the macroeconomic consequences of disasters ”, journal of development economics, 88 ( 2 ) : 221 – 231. 5 / 6 bis central bankers'speeches 6 strulik, h & t trimborn ( 2018 ), “ natural disasters and economic performance ”, environmental and resource economics, forthcoming. 7