the counterfactual. iii furthermore, nobody can seriously pretend that past accommodative policy is the primary factor to blame for the current return of inflation. this would be forgetting how deep the deflation risk was in 2020 and the pandemic, and being mistaken about the present inflation surge : it finds its origins not in excessive liquidity but in supply bottlenecks arising from the fasterthan - expected rebound from the pandemic, and the sharp increase in energy and food prices, much aggravated by the war in ukraine. the core principles of the science ’ s consensus remain valid today. page 3 sur 8 in particular the two first principles — central bank independence and the primacy of price stability — remain essential for the credibility of the central bank. we are benefiting from it today through the — so far — relatively firm anchoring of longterm inflation expectations despite the surge in current inflation. this being said, we should acknowledge that new questions have arisen with the unexpected return of high inflation. let me highlight three. a first question is the slope of the phillips curve. to the enduring debate of whether it had flattened since the 1970s we must now add the question of whether it could be steepening again in the current inflationary environment. the question is central to assess how to quell inflation without engineering a harder than necessary landing of economic activity. second, we still have to understand better how inflation expectations influence actual inflation. in recent years, we have made considerable progress – including at the banque de france — in measuring the expectations of firms and households, which are the ones that matter for price - setting and spending decisions. iv but there is still relatively little empirical work on how their inflation expectations map into their actual pricing and spending decisions. v what the extent of pass - through from inflation expectations to inflation is, or whether past inflation plays a role beyond inflation expectations remain open questions. vi page 4 sur 8 third, what about forward guidance? it was a decisive input of science, thanks to eggertsson and woodford. but at present, in a very uncertain situation, we all tend to move away from it, and even to distrust it because it would tie our hands. does it mean that we also abandon predictability? i will here come to my second part, and focus the art / science nexus on the reactivity / predictability trade - off, if you allow me to assimilate the former to intuition and art, and the latter to

have formulated green banking polices that have been approved by their respective boards. these policies include policy statements on environmental risk management, facilitation of green businesses, and reduction in their own carbon emissions. 27 banks and dfis ( 69 % ) have integrated environmental risk assessment procedures with their credit risk assessment procedures to better evaluate and manage the impact of environmental and climate changes on their credit portfolios. 16 banks and dfis ( 41 % ) have established strategies for facilitation of green businesses by including a policy statement for allocating funds to businesses that intend to lessen their carbon footprint. 2 / 3 bis - central bankers'speeches 18 banks and dfis ( 46 % ) have established annual impact reduction targets including well - defined key performance indicators and strategic plans for achievement of these targets. while a considerable progress has been made towards adopting green and sustainable banking guidelines, degree of implementation varies across the industry. moreover, there is lack of standardization in assessing and identifying environmental risks. i believe setting minimum standards and benchmarks will help ensuring a faster and broad - based progress. to bridge this gap, i am glad to share that today sbp is issuing environmental and social risk management ( esrm ) implementation manual for banks and dfis. an exhaustive approach has been adopted in the development of this manual and its contents have been finalized after thorough consultations with the banking industry. the objective of issuing esrm manual is two - fold. first, to establish a standardized benchmark for environmental and social risk management and compliance of green banking guidelines. second, to focus on social risk ( like child labor, forced labor, safety & health issues etc. ), which will align green banking guidelines with international best practices on environmental and social risk management. adoption of this manual will be voluntary for a period of 3 years, allowing banks and dfis adequate time to establish and integrate their environmental and social risk management systems with credit risk management procedures in a phased manner. the manual will help all the banks and dfis in developing a roadmap for comprehensive implementation of the green banking guidelines. although, the implementation of the environmental and social risk management manual will be piloted in two voluntary banks on a fast - track basis, i will encourage the entire banking industry to take full advantage and use this manual for establishing esrm systems and procedures. state bank, along with ifc, will continue to provide necessary support and guidance at every stage of esrm implementation. i am happy to