I will focus on the latter, on financial institutions’ exposures to transition risks. Efforts have so far mostly concerned investments in certain industrial sectors. Typically, the most climate-sensitive sectors are selected on the basis of an aggregate environmental metric, such as a measure of carbon emissions for the sector.
After all, the only way this "no bail-out" clause can exert its disciplining effect is if financial market players also believe it to be in force. In order to lend credibility to the "no bail-out" rule, sovereign debt restructuring would need to be possible without jeopardising financial stability.