so far in the euro area has largely remained within the safety zone. sufficient capital buffers are crucial – and for large international banks they will have to increase further with the recently adopted requirements for bail - in - capital ( tlac ) – but so is regulatory certainty, which is why i am in favour of bringing basel iii into full effect next year rather than conveying the impression that regulators are already working on a possible basel iv. equity is costly, which is why exceedingly high capital requirements might unduly curtail bank lending. but equity is costly partly because of the preferential tax treatment of debt, which is why i am in favour of doing away with it. furthermore, the recent credit developments do not suggest that the new capital requirements constrict lending on a lasting basis. since last autumn, lending to non - financial corporations has recovered perceptibly in the euro area. and bundesbank research9 suggests that the factors that hamper credit developments for example in spain and italy, such as the private sector ’ s attempts to reduce its debt overhang and the high levels of non - performing loans in banks ’ balance sheets, have abated markedly. of course, this recovery is also partly due to monetary policy measures like the tltros, which specifically target credit provision. 4. fiscal policy if increasing the air pressure of the tyres beyond that optimal level would be a dangerous proposition, what about eschewing fiscal consolidation? is this a viable option for providing a boost? to anticipate the answer : no, it is not. bundesbank monthly report, september 2015. bis central bankers ’ speeches a number of euro - area countries have consolidated their budgets since the outbreak of the sovereign debt crisis. critics such as paul krugman and joseph stiglitz have charged that this consolidation has caused more harm than good, as spending cuts and tax increases served to dampen already weakened aggregate demand even further. consequently, they are calling for a loosening of the euro - area fiscal stance. but for many countries without fiscal space, that is simply not an option if we do not want to return to the days of 2011 and 2012, when doubts about the sustainability of fiscal policy led to very high interest rates in some euro - area countries. this leaves the countries with fiscal space to raise spending, germany among them. however, the periphery ’ s share of german imports is very low, which suggests that spillovers would remain modest – all the more as

sabine mauderer : concluding remarks - ngfs workshop concluding remarks by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the ngfs workshop, singapore, 26 april 2023. * * * 1 introduction ladies and gentlemen, dear colleagues. let me start by thanking all of you for your input, be it on or off the stage, here in this room or virtually. today was an impressive journey through some of the topics that are currently at the centre of our work. perhaps, to some of you, this journey not only seemed impressive, but also a bit overwhelming. if so, that is great! that means the workshop was a success, because we cannot tackle climate change from within our comfort zone. we need to challenge ourselves and have open discussions to identify the crucial questions the financial system is facing – and then try to find some answers. that was the spirit today and that is the spirit of the ngfs. 2 blended finance one of these crucial questions is : what are the most effective ways to raise enough funds to finance the transition and climate adaptation in emerging markets and developing economies ( emdes )? this is particularly relevant as many countries in the global north are pouring lots of money into transforming their economies and lure private capital with generous subsidies. no doubt, such measures are important for these countries to realize their own climate ambitions. but what does that mean for private climate finance flows in emdes if investors may find less risky alternatives in the industrialized world? many central banks and supervisors have a limited role in answering such questions. but as our chair, ravi menon, highlighted this morning, the ngfs should and can use its convening power to help find the right answers. and that is exactly what we did today. we pooled expertise by convening experts from different fields and from all parts of the world to discuss the role blended finance can play. we heard about the challenges that remain in scaling up blended finance, but also about very concrete examples we can learn from going forward. allow me just one overarching comment : we also talked a lot about reducing the risks of transition projects through blended finance. on that, i do want to highlight that, of course, these risks, will not just disappear. they are re - distributed, but not reduced. that means they end up on someone else's book – typically a public sector player. 3 macroeconomic impacts of climate change when it comes to the macroeconomic impacts