system | central bank of ireland | page 5 fined contribution pension plans ) are exposed to carbon - related shocks to financial asset values. there are two categories of market risks. first, current market assessments of the value of carbon - related assets ( for example, the assets of oil - producing firms ) may turn out to be incorrect, if the speed or nature of the carbon transition turns out to be more rapid or more disruptive than current projections. second, as will be discussed further in the next section, the carbon transition may be associated with macroeconomic disruption ( inducing a general financial market correction ), especially if excessive gradualism ultimately requires a sharper transition adjustment in the future. turning to the corporate sector, firms will also have to devote resources to retrofitting offices, factories and retail outlets. in addition, the commercial insurance market faces the same set of issues as the home insurance market. firms that offer defined - benefit pension plans will have to address climate - related market risks. furthermore, the corporate sector faces its own transportation challenges in terms of the transportation of goods and business - related travel. in terms of production processes, firms will also have to reduce reliance on carbon - intensive technologies. this technological challenge will involve a combination of innovation ( finding novel solutions ) and imitation ( implementing best practices from around the world ). in part, this transition will take place within existing firms and industries ; in part, this transition will be achieved by new firms and new industries that are unburdened by legacy assets and technologies. the balance between within - firm adjustment versus the entry of new firms will be a critical factor in determining the balance between debt and equity in financing the transition, since startups naturally require more equity finance than incumbent firms. the construction sector faces particular challenges. in common with other industries, it will have to adapt in terms of switching towards more environmentally friendly materials and production techniques. however, the economy - wide requirement to retrofit existing structures and ensure that new builds meet high energy standards constitutes a structural shift in the role of the construction sector in the economy. in turn, this calls for a supportive institutional environment to ensure that there is sufficient availability of construction workers with the required skills, together with the constellation of policies that will facilitate scale efficiencies in the rollout of this work programme. similarly, the agricultural sector faces both transition challenges and opportunities. in addition to grappling with the curtailment of greenhouse gas emissions, farmers will have to respond to possible environmentally

the improvement in aggregate debt quality and performance conceals important underlying changes in debt holdings that could be consequential, with implications for the housing market and for consumer spending over the longer term. while older borrowers hold more debt of all types, there has been a significant shift among younger people toward student debt and away from mortgage and other debt. student debt has increased more than fivefold over the past 14 years, with more young adults taking out loans and borrowing larger average amounts. and, while debt delinquency rates overall have fallen, those for student debt have remained elevated. since 2012, the new york fed has devoted considerable attention to the rapid growth in student debt levels and delinquencies by publishing a number of reports. the findings in these reports were largely based on data from our consumer credit panel ( ccp ), a nationally representative dataset sourced from equifax credit reports. this unique dataset has enabled us to provide new insights into the overall state of the student loan market and into individual student loan borrowing and repayment behavior not available from other data sources. 1 / 3 bis central bankers'speeches today, we will first provide a brief overview of aggregate household debt and its borrowers, followed by a presentation based on new research on student debt, which focuses on delinquency and repayment rates. we find that recent cohorts of college students are defaulting at a lower rate than those who left higher education during the recession. but, at the same time, their repayment rates are also lower. despite an improving labor market, overall delinquency rates on student debt remain stubbornly high, and repayment progress has slowed further, likely reflecting the recent introduction of more accommodative payment plans. payment progress is particularly low for those with larger debts and for those from lower - income areas. much remains to be learned about the causes of the observed expansion of debt burdens and repayment problems among recent college graduates. over the past two decades, there has been a significant change in the financing of higher education — with state and local funding covering a smaller share, and students and their families bearing a greater proportion of rising college costs. while the federal student loan program has undoubtedly helped mitigate the impact of higher costs on college enrollment, more students now leave college with higher amounts of debt. at the same time, college dropout rates remain stubbornly high, and empirical evidence indicates that graduates from some colleges have had trouble finding