Regarding reporting requirements for banks under the Third pillar, the second Capital Requirements Regulation for banks (CRR2) provides that large financial institutions6 that have issued securities listed on a regulated market of any of the Member States must publish information on ESG risks every six months.
The authors note that hystereris can be sizeable, but depending on the evolution of the (unobservable) underlying growth trend, the consequences are conflicting for monetary policy: in the presence of hysteresis, output deviation from its optimal level can be long lasting and call for a strong monetary response; but the response may prove too strong if we understand too late that the underlying trend has in fact changed.