keynote speech by yannis stournaras, governor of the bank of greece at the athens circular forum ii 31 / 05 / 2021 - speeches it is a great pleasure to be here with you today and have the opportunity to share my thoughts on climate neutrality, circularity and sustainable finance. economic growth has come at a growing cost to the environment. it is telling that humanity ’ s demand for ecological resources and services in a given year exceeds what earth can regenerate in that year, in fact we need more than 1. 5 planets to support our current consumption patterns. [ 1 ] sustainability is therefore highly relevant for our generation, as well as for generations to come, and redefining the concept of growth in a sustainability context will be crucial for our future path. under conditions of depletion of natural resources worldwide, a focus on more efficient use and minimisation of waste emerges as the only and urgent option. the model of a “ linear ” economy prevailing today ( sourcing – manufacturing – usage – disposal ), on which most economies since the industrial revolution have relied, is no longer sustainable. just like nature, which operates in a “ circular ” manner, business activities can become sustainable by switching from the “ linear ” model to a “ circular ” one. circular economy means that the value of products, materials and resources is maintained in the economy for as long as possible and waste generation is minimised. in changing the current extractive industrial model, the circular economy model aims to redefine growth and provide society - wide benefits by decoupling economic activity from the consumption of finite resources, by transitioning to renewable energy sources and by reducing the negative impacts of the linear economy. the development of circular business models will require innovation and structural change of production and consumption systems alongside technological change. for example, interventions on the supply side, such as eco - design and longer life cycles of products, as well as on the demand side, through a change in consumption and dietary patterns and a more efficient management of waste. this transition is expected to have a positive effect as the circular model builds economic, natural and social capital and represents a systemic shift that builds long - term resilience by generating business and economic opportunities, with environmental and societal benefits. according to unep, the transition to a circular economy could generate usd 4. 5 trillion [ 2 ] in annual economic output by 2030. financial institutions have a critical role to play, scaling up financing, accelerating the shift towards

monetary union is not viable in the absence of a banking union. more recently, with the recovery in the euro area still fragile, new geopolitical tensions have led to an unprecedented refugee crisis and increased uncertainty. finally, matters such as the consequences of brexit, different approaches among member states regarding banking union, and the slow progress in establishing a single european deposit insurance scheme, have been hindering further progress in securing the financial system architecture needed to enhance stability. ssm has been the catalyst for the banking union of the eu. it provides a framework for common rules and policies across the euro area banking sectors ; it enhances single supervisory treatment over segmented national practices. but it also has to cope with increased uncertainty in two areas : the possibility of major changes in the future regulatory framework and the way that new regulation is going to be applied. bis central bankers ’ speeches