. for ireland ’ s economy to recover, its banking system must be sound and fully functioning. a virtuous cycle must blossom. that will be difficult to instil with banks that remain dependent on eurosystem support. with measures in place to break this dependency, the conditions will be in place for recovery. the foundation for this recovery has already been laid. in late 2010, the ecb played a key role in mitigating the challenges facing the banking system, and in designing programme measures to reverse the situation. i hope you share my view that these measures achieved their initial aims : the stabilisation of the banking system. i know that the decisions concerning the repayment of bondholders in the former anglo irish bank have been a source of controversy. decisions taken by the irish authorities such as these are not taken lightly. and the consequences of subsequent actions are weighed carefully. it is true that the ecb viewed it as the least damaging course to fully honour the outstanding senior debts of anglo. however unpopular that may now seem, this assessment was made at a time of extraordinary stresses in financial markets and great uncertainty. protecting the hard - won gains and credibility from the early successes in 2011 was also a key consideration, to ensure no negative effects spilled - over to other irish banks. determined action and a willingness to take tough, even controversial decisions, has placed ireland ’ s financial system on a steadier footing. a necessary step for ireland to emerge from this crisis will be to ensure the long - term viability of the banking system as a pillar of the irish economy. doing so will further enhance confidence in the system and limit the burden that the banking system places on the taxpayer. any proposal to reorganize and strengthen the irish banking sector, and in this context to replace promissory notes with support from the efsf must meet important criteria, including that it should improve the chances of both the state and the banks returning to market - based funding, and of the banks reducing their extraordinary reliance on the eurosystem. the ecb is ready to work with the irish authorities on such proposals. i understand the strong desire of the authorities to minimise the costs associated with the banking sector rescue, including costs incurred to date, and those still to come. let me make some comments in this area. when the programme for ireland was designed, the costs of the banking sector measures already in place, including the promissory notes, were fully factored in. the

horrific ongoing war against ukraine, the eu has pledged to become independent from russian fossil fuels well before 2030 under its repowereu plan. the european commission estimates that reaching the fit - for - 55 and repowereu objectives requires an average annual investment of €1. 25 trillion over the years 2021 - 30. [ 2 ] that estimate would add around €500 billion to the level of annual investment in climate and energy security seen in the previous decade. most of this additional investment will need to come from the private sector as households and firms adjust to a net - zero economy. however, significant shortcomings in the functioning of the financial system are presently curtailing the flow of investment in green – and therefore truly sustainable – economic development. gaps in finance most prominently, carbon pricing is still not being used to an adequate extent. progress has been made : the carbon price in the eu ’ s emission trading system has been rising since 2021, and the european council and european parliament recently agreed on extending the scheme ’ s scope of application and on a mechanism to equalise the price of carbon between domestic products and imports. [ 4 ] however, overall emissions continue to be improperly priced, implying that economic activity – including the flow of finance – remains biased in favour of high - emission activities. besides the gap in carbon pricing, a second gap is that capital markets are not playing their potential role in supporting the green transition. ecb research shows that stock markets can strongly encourage investment in greener technologies. [ 5 ] however, those markets are still relatively underdeveloped in the eu and a lack of harmonisation limits cross - border flows. resolving these issues and advancing a capital markets union, as proposed by the european commission, will boost the efficiency and resilience of the flow of finance in europe. as ecb president christine lagarde has said when speaking about the green transition, developing the capital markets union is “ too good an opportunity to pass up ”. [ 6 ] today i add : we must seize this opportunity. a third gap can be identified in the approach banks are taking to climate - related and environmental risks in their activities. in recent years, the ecb has conducted several benchmarking exercises among banks under our supervision to assess their practices against our expectations for a sound management of climate - related and environmental risks. these exercises showed that while almost all banks acknowledge the importance of climate - related and environmental risks and while we are seeing progress, banks ’ practices to manage these