increased sectoral granularity and geographical coverage, especially in emerging economies; inclusion of short-term scenarios, incorporating more adverse tail-risk events such as a sudden policy shock; and improved representation of acute physical risk. Blended finance To get to net-zero by 2050, we have to close a large financing gap. According to McKinsey, net zero by 2050 will require about $ trillion of investment per year, but only about $ trillion per year is being invested today. We are more than 35% short of the annual investment required for net-zero. Blended finance will be crucial to unlocking more capital for green and transition projects, particularly in emerging economies. Blended financing structures can alter the risk-return profile of many marginally bankable projects. This can be done through catalytic and concessional funding from the public sector, multilateral development banks, and philanthropic sources to crowd in multiples of private capital. By mitigating a portion of project risks, providing technical assistance, and lending their reputation and expertise, the public sector can help to attract private capital which may otherwise be hesitant to invest. We need to mobilise the financial system to deploy blended finance at scale. The NGFS will contribute to this effort in three ways. We will use our convening power to raise awareness of blended finance and help to bring the relevant parties into the room. We will seek to identify potential regulatory, market or policy barriers that hamper the scaling up of blended finance.
deposits of less than € secured liabilities, such as covered bonds; and liabilities arising from participation in payment systems, along with interbank liabilities with an original maturity of less than seven days. The draft Directive further requires Member States to set up ex-ante resolution funds. These funds will be used to temporarily support banks under resolution by means of loans, guarantees, asset purchases or capital for bridge banks. They will also be used to fund what may be called an “element of flexibility” of the Directive, which I shall refer to in a moment. Over the next 10 years these funds must be built up to a volume equivalent to at least 0.8% of the insured deposits of the country’s credit institutions. In this connection, banks must make annual contributions based on their liabilities. The draft Directive leaves to the discretion of the Member States the matter of whether resolution funds and deposit guarantee funds are merged or kept separate. Finally, as I said earlier, the Ecofin agreement introduces an “element of flexibility” so that national resolution authorities, in certain exceptional cases and subject to strict criteria, may fully or partially exclude any category of liabilities from the bail-in, and use the resolution fund to finance this exclusion. However, as a general rule, they may only resort to such flexibility after losses have been imposed on shareholders and creditors for a minimum amount of 8% of the total liabilities of the bank subject to resolution.