if left unchecked, global heating and nature degradation will contribute to increased macroeconomic volatility as 1 / 4 bis - central bankers'speeches climate and nature events become more frequent and have a greater impact on the economy. a successful transition to a green and sustainable economy, meanwhile, will require vast investment flows that will alter the way our economies function. second, the economic benefits of a timely transition far outweigh the costs, especially when considered against the alternative scenarios of doing nothing or doing too little too late. 1 third, climate - related risks translate into financial risks. early work by the basel committee on banking supervision ( bcbs ) shows that climate events are a driver of each traditional type of risk considered in the regulatory framework, from credit risk, liquidity risk and market risk to reputational and operational risk, including legal risk. 2 floods, for example, could damage a company's production facility, which could affect its ability to repay a loan, in turn leading to higher credit risk for the bank that provided the loan. or consider what might happen if your house is built in an area vulnerable to wildfires. your home could fall in value, leaving the bank that granted you the mortgage with higher risk on its balance sheet. and these financial risks are not related solely to climate change. last year, when looking at more than 4. 2 million individual companies that account for over €4. 2 trillion in corporate loans, we found that nearly 75 % of all bank loans in the euro area are to companies that are highly dependent on at least one ecosystem service. 3 examples of these services include the products we obtain from ecosystems, such as food, drinking water, timber and minerals ; protection against natural hazards ; or carbon uptake and storage by vegetation. if these ecosystem services continue to experience the level of degradation they are currently facing, the stability of individual financial institutions and the broader financial system will be at risk. international standard - setting bodies driving global action recognising the relevance of climate and nature - related factors for the economy, including the financial system, international standard - setting bodies are increasingly turning their attention to this topic. this has resulted in substantial progress at the global level, although more work lies ahead of us. for example, the bcbs has a dedicated task force on climate - related financial risks, whose meeting this week is kindly hosted by the banco central do brasil. based on the work of this task force, the bcbs has taken concrete steps to

mario draghi : atlantic council remarks speech by mr mario draghi, president of the european central bank, at the 2015 atlantic council global citizen award, new york, 1 october 2015. * * * ladies and gentlemen, thank you for honouring me today with this global citizen award. and thank you also for honouring, through me, all those who have worked – and continue to work – to maintain the cohesion of the european union, and to bring its integration process closer to completion. the fate of europe is naturally of immediate interest to its citizens. but it is also indeed of direct relevance to the world at large. the european union and its monetary union are regional projects with global implications. this is firstly due to the size of europe in the global economy. though the euro area has not made a major contribution to world growth over the past seven or eight years, it nonetheless accounts for 17 % of global gdp and 16 % of global trade. when the integrity of the euro area was under threat, so too was global prosperity. christine lagarde, who has chaired many imf gatherings where the first topic under discussion was the euro area, can testify to that. by the same token, the return of the euro area economy to sustained growth, under the impulse of our monetary policy, is good news for everybody, everywhere. to my mind, however, there is another reason why the euro area is crucially relevant to the global economy. it comes from the fact that european integration is by far the most advanced experiment in managing issues that cut across borders, through a combination of international and supranational arrangements. 65 years ago, the founders of the eu decided that we could only achieve results if we were united in facing common problems. at the time, the problem was war and the objective was peace. and it worked. but now, the nature of the many challenges we face shows how right this approach fundamentally was : think of migrants seeking refuge in our countries, the threat of terrorism, the consequences of climate change, the recent succession of financial and economic crises. and these challenges are not specific to europe. they are global. i am certainly not suggesting that the path followed by europe to manage them is replicable at a global level. but the experience we have gathered, the experimentation with supranationalism, the failures and the successes, all carry invaluable information for those involved in managing global issues. it may seem at times that we in europe