These concepts are only vague guideposts at the best of times, and they are particularly fraught with uncertainty in the current environment. Before the pandemic, the real natural rate of interest for the euro area was estimated to range from just over 0% to less than -2%, depending on the model used.
And even the greatest climate sceptic on Earth cannot afford to ignore these risks. At the same time, new regulation will create great opportunities for those who invest with foresight. And as the financial sector, seizing opportunities and managing risks is your core business. Being a prudential regulator, you’ll forgive me if I start by discussing the risks.