of the eu financial system have increased considerably. key risks stem from potential further adverse feedback effects between sovereign risks, funding vulnerabilities with the eu banking sector, and a weakening growth outlook both at the global and the eu level. over the past few months, sovereign stress had moved from smaller economies to some of the larger eu countries. signs of stress are evident in many european government bond markets, while the high volatility in equity markets indicates that tensions have spread across capital markets around the world. the situation has been aggravated by the progressive drying - up of bank funding markets, and availability of us dollar funding to eu banks had also decreased significantly. in that context, central banks have decided on coordinated us dollar liquidity - providing operations with longer maturities. the high interconnectedness in the eu financial system has led to a rapidly rising risk of significant contagion. this is threatening financial stability in the eu as a whole and adversely impacts the real economy in europe and beyond. looking ahead, decisive and swift action is required from all authorities. in the immediate future this includes : ( 1 ) implementing, fully and rapidly, the measures agreed upon at the 21 july meeting of the heads of state or government of the euro area ; ( 2 ) adopting sustainable fiscal policies and growth - enhancing structural measures so as to achieve or maintain credibility of sovereign signatures in global markets ; and ( 3 ) enhancing the coordination and consistency of communication. authorities must act in unison with a total commitment to safeguard financial stability. supervisors should coordinate efforts to strengthen bank capital, including having recourse to backstop facilities, taking benefit from the possibility of the european financial stability facility to lend to governments in order to recapitalise banks, including in non - programme countries. i thank you for your attention.

change, in particular in key areas like inflation, productivity and trade. a recent study found that, out of approximately 77, 000 articles published in top economics journals, less than 60 have been on climate change. 7 so the ecb will also strive to deepen its analysis and its modelling in this field. what we do know so far suggests that climate change will affect monetary policy. for instance, research on natural disasters suggests that climatic events could make inflation more volatile, especially in the short run. 8 and over time, mitigation strategies such as carbon taxes could have significant and persistent effects on relative prices. in other words, bringing climate change more fundamentally into our analysis and strategy is not “ mission creep ” : climate change is also a price stability risk. the second area where we can already make progress is on properly reflecting climate risks. 3 / 5 bis central bankers'speeches there ’ s a growing awareness today that banks and financial institutions are exposed to material climate risks. these include physical risks from natural disasters and climate change, and they include risks from a disorderly climate transition. these risks are not distinct, because rising physical risks make a disorderly transition more likely – a combination mark carney has termed “ the tragedy of the horizon ”. 9 so it ’ s crucial that both the public and the private sector take these risks into account more systematically, for instance by setting higher standards for climate risk disclosure. we ’ re already seeing progress in the private sector, especially among large investors, and france is leading the way at the country level. 10 the commission ’ s green deal agenda sees european standards on disclosure being tabled in the course of 2020. at the ecb, we will also do our part – and we are already starting to promote climate risk disclosure across our range of tasks. for example, we ’ re examining the disclosure standards we will need in order to incorporate climate issues into the risk assessment of our collateral framework. ecb staff have also started working on a comprehensive climate risk stress - testing framework, which is due to be ready by the end of the year. and our banking supervisors are assessing banks ’ climate risk disclosures and examining how those risks should be embedded in the supervisory process. this is an area where europe has an opportunity to lead the world, both as a global standard setter and as a centre of green finance. and this could support other policy goals. the eu is already the largest international market for green bonds : european entities account for around 50 %