The economic consequences of this shock will be felt in the long run as well as in the adjustment towards the new steady state of the economy. Let me start with the long run.The new equilibrium is characterised by structurally higher growth rates of productivity, implying higher profitability of investments.
In particular, this may affect the credit and operational risk exposures of banks that would, in turn, translate into profitability and solvency concerns. We also recognize that the BSP has a role to play in the process. In line with this, we have rolled out a two-pronged approach in promoting environmental, social and governance (ESG) principles.