will in turn reduce their ability to borrow and fund investment and spending. it will affect the value of property. and it will affect the quality of the loan portfolios of banks. what does all this mean for ireland? take insurance first. our insurance sector is very international. for example, 80 per cent firms operating here conducted underwriting business in the european economic area ( eea ) ( excluding ireland ) in 2018. a substantial number of firms also operate further afield, outside the eea. the value of premiums underwritten outside of ireland was significant, accounting for 73 per cent of the total value of underwriting in 2018. the irish insurance sector is exposed to shocks from across the globe. and what of banks? irish banks are heavily exposed to property. as are households and businesses. property - related lending, for example, accounted for 68 per cent of the loan portfolios of irish resident banks in the third quarter of 201816, while the asset holdings of irish households are also heavily focused on property – accounting for almost 70 per cent of household net worth17. so adverse weather events that affect property can affect several aspects of the economy and financial system. transition risks in addition to getting active, what of the third request? imagining the world we want to get to is easy. a greener world with less plastic and ultimately – a low carbon economy without the devastating impact of climate change. however, the journey to this world is not risk free. the risks i am referring to here are termed ‘ transition risks ’. transition risks refer to : the impact of the adjustment towards a low - carbon economy ; and the uncertainties related to the timing and speed of the adjustment. 3 / 8 bis central bankers'speeches with regard to timing, the sooner we start on this journey the better. the longer we wait, the greater the adjustment that will be required to meet our goals. the speed of this adjustment must also be managed. as an economist, implementing a carbon tax seems like a sensible way to price in the externalities associated with high - carbon technologies and products. however, the implementation of such a tax must consider the capacity of the economy to switch to low - carbon products to be as effective as possible. adjusting to a lower - carbon economy will involve changes in policy to encourage shifts in consumption and investment. this will have implications for both economic activity and asset prices. the expectations of economic agents regarding the timing of transition will also play a role, affecting, for example, the

agnes benassy - quere : towards an extended policy mix speech by ms agnes benassy - quere, second deputy governor of the bank of france, at the european university institute, robert schumann centre, economic and monetary union lab seminar, florence, 22 march 2024. * * * it is a great pleasure for me to be here in florence, and i would like to thank marco buti and giancarlo corsetti for giving me the opportunity to share some thoughts about the policy mix – a topic they know very well. since we are here to celebrate the emu lab, i will focus on the european policy mix. i will first review how it has actually worked since the inception of the economic and monetary union ( i ) ; then, i will discuss the complexification but also enrichment of the policy mix over time ( ii ). i would like to convince you that the policy mix is more than what you think. i. the policy mix since maastricht as you all know, the euro area's policy mix was born in maastricht, netherlands, in 1992. hence it was maybe not a coincidence that the maastricht treaty de facto endorsed the instructions of a dutch economist, jan tinbergen. " one objective, one instrument " : the single monetary policy was put in place to ensure price stability at the level of the euro area, while fiscal policies were assigned to output stabilisation at the level of each member state. this framework implicitly assumed the absence of supply shocks. with only demand shocks, there would be no trade - off between price stability and output stability, whether at the euro area or at the member state level. the set - up was clear, simple and straightforward. it was assumed that during economic booms, governments would accumulate buffers that they would subsequently spend to cushion inevitable crises. in this way, they would stabilise their economies while avoiding running excessive deficits. as argued by my co - authors elga bartsch, giancarlo corsetti, xavier debrun and myself in a geneva report in 2020, i the credibility of fiscal policy reinforces that of monetary policy, and vice versa. indeed, fiscal discipline enhances the effectiveness of monetary policy by reinforcing the independence of the european central bank. and reciprocally, a credible central bank delivers price stability at low levels of real interest rates, reducing the risks of snowball effects for sovereign debts on several