undesirable effects also for the conduct of monetary policy. a final objective of banking union is to increase the efficiency of the banking system which is the dominant source of finance for the european economy. this will be achieved in different ways. first, the ssm will be a strong and independent supervisor, enforcing supervision consistently across the participating member states. with supervision at a european level, the focus of supervisory activities will be aligned with the activities of cross - border banks and the area - wide financial sector, thus less subject to domestic considerations. with a micro - prudential task and an extensive set of powers, the ssm should be able to monitor risks faced and stemming from individual banks in the system and address them in a timely fashion. this is supported by the macro - prudential task conferred to the ecb entailing the monitoring and addressing of risks from a system - wide perspective. the fact that the ecb has been given power over the direct application of macro - prudential instruments as well as a coordinating role among all member states, is an important innovation of the new regulation that will improve financial stability in the euro area. furthermore, the ssm will have a european focus and support the development and effective application of the single rulebook, the harmonisation of supervisory practices and procedures, creating a level playing field and reducing compliance costs. the ssm, coupled with the other elements of the banking union should be conducive to ensuring the most efficient allocation and transfer of intra - group capital and liquidity. therefore, it should contribute to the creation of truly paneuropean banks and enhance cross - border banking integration which will reduce transaction and compliance costs and bring efficiency gains. on the other hand, the new framework may lead down the road to a period of consolidation in a not much concentrated european banking sector. in fact, there is scope for further consolidation without reinforcing the so - called “ too - big - to - fail ” problem and for reaping the benefits of efficiency - driven consolidation. the present weak profitability in the banking sector and the existence of over - capacity in certain areas of the european market suggest that some efficiency gains could be achieved. authority, helsinki, 12 february 2013 ; towards a european banking union, speech by vitor constancio, vicepresident of the ecb, lecture held at the start of the academic year of the duisenberg school of finance, amsterdam, 7 september 2012 ( ecb website

##s to climate - related physical risks. we will introduce disclosure requirements for private sector assets as a new eligibility criterion or as a basis for a differentiated treatment for collateral and asset purchases. we will start conducting climate stress tests of the eurosystem balance sheet in 2022 to assess the eurosystem ’ s risk exposure to climate change, leveraging on the methodology of the ecb ’ s economy - wide climate stress test. we will also consider relevant climate - change risks when reviewing the valuation and risk control frameworks for assets mobilised as collateral by counterparties for eurosystem credit operations. 2 / 3 bis central bankers'speeches and we will adjust the framework guiding the allocation of corporate bond purchases to incorporate climate change criteria, in line with our mandate. our actions regarding climate change also extend beyond monetary policy operations. the ecb has committed itself to reducing its own carbon footprint in line with the paris agreement. and the ecb banking supervision will ensure that every bank is making swift progress in embedding climate risks into their organisations drawing on the full supervisory toolkit at our disposal where necessary. conclusion let me conclude. the strategy review has provided us with a framework to evaluate how our policy implementation could evolve to further incorporate climate considerations without prejudice to our primary mandate. the ecb will continue in the future to evaluate all options against this framework and as conditions develop more options may become feasible in the future. the challenges the world already faces due to the climate change will only increase over time. therefore, within our mandate, we will continue to analyse climate - related risks, to provide advice to stakeholders, and, importantly, to act. 3 / 3 bis central bankers'speeches