reporting of sustainability information. let me now turn to my second question : what needs to be done to ensure the stability of the financial system as a whole amidst climate change? strong risk management at the firm level is a necessary condition for preserving financial stability amidst climate change. but it may not be sufficient. climate - related risks are broad, but correlated. this means that they could crystalise across multiple jurisdictions and sectors simultaneously, think of the drought, heatwaves and wildfires all over europe during the course of the summer. such widespread climate events can have implications for the resilience of the broader financial system. manifestations of climate risk may give rise to abrupt increases in risk premia across a wide range of assets. this could alter asset price movements or co - movements across sectors and jurisdictions ; amplifying credit, liquidity and counterparty risks ; and raising challenges for financial risk management in ways that are hard to predict. to address both risks to individual entities and those to the system as a whole, we need actions that are both bottom - up and top - down. developing such a top - down, or system - wide, perspective faces a couple of significant challenges. the first is data gaps. firm - level disclosures are an important contribution to closing such gaps, but do not provide all the information needed to gauge climate risks and translate those into financial exposures. we need to make use of the data already available to devise simpler indicators that can help identify the build - up of vulnerabilities, and not wait until we have the perfect data set. and, considering the uncertainty about how risks from climate change will materialize, it is critical to further develop scenario analysis, making use of the common network for greening the financial system ( ngfs ) climate scenarios. a related challenge is to integrate climate risks into broader financial stability surveillance. this requires not only an understanding of climate - related vulnerabilities in different parts of the financial sector and relevant transmission channels. it also requires data and models to assess potential impacts across the system as a whole. in this regard, data repositories that provide open access to data in a consistent form should be promoted, as a public good. such information will support the provision of sustainable finance and ensure the proper functioning of the financial system. scenario analysis is a key tool for assessing financial vulnerabilities. the fsb is working jointly with the ngfs on the use of effective scenario analysis by jurisdictions and on the

’ confidence and the financing of the economy in their own countries. nonetheless, they have neither the powers nor the instruments to deal with the impact of decisions in terms of supervision, resolution and implementation of competition rules, which are taken at european level and significantly restrict the options available to national authorities. this limitation of powers and instruments, however, is not perceived by the common citizen, given that national authorities – with responsibility for national financial stability – continue to be the most visible decision maker and communicator. the depositors ’ incomplete reading of the decision - making process inevitably weakens confidence in the conduct of financial policy and in the system itself. therefore, european restrictions on national authorities ’ action, in a context where risksharing at european level is not complete, not only hinder the safeguarding of financial stability, but also heighten the underlying risks, affecting agents ’ confidence in the financial system. third, in europe, multiple entities define and implement sectoral policies with material impact on financial system developments, especially the single supervisory mechanism ( and the governing council ), the single resolution mechanism and, with regard to the implementation of regulations and competition rules, the european commission. these entities are focused on their respective mandates and, in spite of the evident spillovers, their action is not appropriately coordinated or framed within an overall view of sectoral policy for the financial system. in effect, both regulation and its discretionary component, i. e. the practice of supervision, resolution and the enforcement of competition rules, have sectoral and national bis central bankers ’ speeches consequences. these tend to be more relevant the lower the coordination is among the different authorities and the further away the decision centre is from the territory affected by the decisions. such difficulties are further hindered by the absence of decision - making mechanisms at european level which may ensure the agility, swiftness and confidentiality indispensable for an effective banking resolution function. the current situation poses significant challenges that require urgent reflection and action at european level ; otherwise, the growing negative perception regarding the european project may deteriorate further. the asymmetry between powers and accountability and the limited vision arising from the fragmentation of responsibilities and the absence of a consistent sectoral policy at european level give rise to perverse incentives. if these are not adjusted in due time, they may jeopardise the sustainability of the banking union itself and the objectives underlying its creation. where we are going : from the banking union to the capital markets union the banking union