If we eliminate the bias in these findings resulting from the inclusion of construction and real estate activity, which should not be included under either polluting (“brown”) or “green” activities, polluting activities continue to have a lower default rate, although the gap between the two is much narrower. In any event, I believe the findings are unsurprising. Many companies labelled as “brown” have high profit margins and their ability to generate profit is partly a result of their being regulated activities and having, in many cases, a dominant market position. Moreover, to date these companies have not had to assume the cost of the pollution they cause, so in an energy transition scenario their advantage in terms of profit margin could be affected. The banking sector as a facilitator of change in the production model I should like to refer briefly to the second point I mentioned above. As indicated in the 2015 Paris Agreement, the banking sector has an essential part to play to facilitate change in the production model. Indeed this second goal is related to the first, as correctly measuring environmental risk should assist in the transition towards a more sustainable model and would, therefore, be a logical consequence of the first goal. As I have said previously, one essential feature of any viable business model is that banks identify and quantify all the costs and risks involved and pass them through to prices and capital.
Another important issue is the involvement of finance ministries in the crisis management framework. A High-Level Working Group, comprising representatives from the ministries of finance, central banks and banking supervisors, is working on concrete proposals for cooperation arrangements between the three authorities at EU level. As regards financial stability monitoring, the EU framework has been enhanced considerably in recent years. In this context, I would like to highlight the stability assessment of the EU banking sector, performed by the ESCB’s Banking Supervision Committee, and the comprehensive analysis of potential vulnerabilities in the euro area financial system as a whole, which was carried out as part of the ECB’s Financial Stability Review. In addition, the CEBS is expected to improve its internal exchange of information on individual institutions and groups. 2  BIS Review 18/2005  Markets I now turn to the second component of the financial system, the financial markets. The introduction of the euro and the measures adopted under the FSAP have spurred the integration of the European financial markets. Nevertheless, there continue to be varying degrees of integration. Wholesale money and bond markets tend to be relatively well integrated, but only the unsecured euro money market has reached a fully satisfactory level of integration. The integration of the market of debt securities has been significantly increased, although not yet reaching the level of the United States.