The taxonomy will also pave the way for plans that will be announced soon to mandate the adoption of climate related financial disclosures by financial institutions. In addition, we are supporting efforts by the Government to strengthen the capacity of development finance institutions to enable them to play a more significant role in crowding in sustainable finance from the private sector, supporting the capacity building needs of businesses in transition, and scaling up innovative financing mechanisms. In light of the current challenges faced by businesses and individuals, we see a greater need and significant prospects for new forms of blended finance to support the recovery process and meet transition challenges. To this end, the Bank is engaging with the financial industry, including DFIs, and other key stakeholders on strategies to combine commercial lending with alternative funding sources such as philanthropic funds and social finance instruments. This includes upscaling existing pilot programmes. Such blended finance solutions will be important to reduce debt levels and future risks to growth and financial stability. During this period, the Bank has also established concessionary financing facilities dedicated to help SMEs automate and digitalise their operations. This will enable them to take advantage of new technologies to enhance income streams and build greater resilience. Thirdly, we believe collaborative partnerships will play a larger and more critical role in shaping financial policy going forward.
The potential for online payment solutions is great enough to offer scope both for secure card payments and for e-payments based on online banking. The ECB strongly supports the emergence of SEPA-wide online e-payment solutions, such as those that already exist at the national level, for example in Germany, Austria and the Netherlands. In my view, European wide implementation of such innovative ideas is very much needed. Both increased security for “card-not-present” transactions and the introduction, throughout Europe, of e-payments based on online banking will provide more payment options for users. And such developments will also address a problem that greatly concerns central banks: safety. I firmly believe that for “online shopping” the payments industry needs to deliver a solution that permits customers to pay for their purchases in a safe way. This brings me directly to the last of my proposed New Year’s resolutions: New Year’s resolution number five: let’s not forget about security The security of retail payments is key to ensuring that consumers and businesses place their trust and confidence in SEPA. The risk-based approach applied by individual banks may not be sufficient to achieve the level of security that is required at the aggregate industry level. The reason for this is that commercial risk tolerance may differ from social risk tolerance. In the seventh SEPA progress report we dedicated a chapter to the topic of security. By sending a number of ambitious messages we have ensured that the necessary attention will be paid to this topic.