real eu banking union, financial institutions should be an eu matter, both in life and in death. apart from completing the bu, other elements are necessary to continue making progress towards a more complete financial union. from a regulatory perspective, the lack of a sufficiently homogeneous legal basis across the eurozone is evident. while full harmonisation may not be possible in the foreseeable future, there are some critical areas, such as anti - money - laundering, fit and proper standards and insolvency rules at credit institutions, where a common set of rules across the eurozone would foster the integration of the market, improving also the efficiency of supervision and resolution. as regards the institutional side, and looking beyond the bu, i want to highlight a second priority which, in my view, is essential to enhance the capacity of the euro area to cushion macro - financial shocks. this capacity is linked to the development of deep and integrated capital markets. the completion of the capital markets union ( cmu ) would complement the bu and would foster a truly cross - border financial sector, allowing economic agents to smooth asymmetric, national shocks. last, but possibly not least, it may also be time to tackle the absence of a pan - european safe asset. while controversial, the implementation of a single eu risk - free asset would likely become a common benchmark, allowing the prices of equities and bonds across the euro area to reflect fundamental risk more clearly, enhancing the effectiveness of monetary policy and fostering the attractiveness of european capital markets. a safe asset would also help mitigate the bank - sovereign nexus, reduce cross - border safehaven flows in the event of crisis and, ultimately, improve financial integration. of course, we should be cautious to design it in such a way as not to water down the incentives for sound national fiscal policies, which are the essence of achieving safety. 4 / 5 let me conclude. throughout its history, the eu has followed a path towards greater economic and political integration, which has brought clear benefits in terms of economic growth and citizens ’ rights. the bu is an important step in this direction and has been key to addressing the euro crisis. still, the implementation of certain regulatory and institutional elements are needed to reap the economic benefits of an increase in cross - border banking activities. when assessing our capacity to deal with future financial crises, we should not forget that the institutional setting remains incomplete and policy space has been reduced. as memories of the crisis fade, we should strive

remarks by javier guzman calafell, deputy governor at the banco de mexico, at the panel on “ developing sustainable capital markets : mapping the challenges and setting priorities ”. omfif – dz bank, washington, dc, october 19, 2019. 1 i thank the organizers for the invitation to participate in this panel. mainly as a result of increasing carbon dioxide and other greenhouse gas emissions that have come about as a byproduct of economic activity at large, but particularly in sectors heavily reliant on fossil fuels, global temperatures are at present higher relative to pre - industrial levels, and are projected to rise further in coming decades. in addition to the environmental, health and broader welfare costs that such damage is already impinging, climate - related risks are among the main threats faced by the world in the medium - to longrun, especially in view of scenarios with potentially catastrophic and irreversible consequences, which are currently envisaged as plausible. given the complex and multidimensional nature of the issue at hand, as well as the extensive and, to a significant degree, unknown ramifications that may ensue, any sensible proposal with realistic chances to effectively contribute to a solution must contemplate the simultaneous and coordinated action of diverse, albeit complementary, policy tools. in addition, even though unilateral efforts at the domestic level are essential, international cooperation is needed to successfully overcome these challenges. why is the involvement of central banks in these issues important? the views and opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the institutional position of the banco de mexico or of its board of governors as a whole. to start with, climate change is expected to have substantial macroeconomic consequences in coming decades, as it will adversely affect output in a number of sectors. the most severe impact will fall on climate - sensitive sectors, such as agriculture, forestry, coastal real estate and tourism. this may also be reflected on global inflation, to the extent that agricultural and other prices fluctuate more widely, as a result of more frequent and more severe extreme weather events. it is also worth noting that although vulnerabilities vary across countries, those that will likely be most exposed to these risks are among the group of developing economies, in view of the sectoral composition of their gdps, their geographical location, their poverty levels and a more limited capacity to adapt. average estimates of the impact of a 3 degrees celcius