Converting our quantitative and qualitative challenges into unprecedented opportunities 2/4  BIS central bankers' speeches  Our objective is to enhance the role of the financial system, not only to manage climate change– related risks, but also to “mobilise capital for green and low-carbon investments.”14 But  financing the transition to a low-carbon economy is both a quantitative and qualitative challenge. [slide 5] The quantitative challenge is linked to the massive investment required in three areas: first, infrastructure and technical solutions, especially in transport, energy production and consumption and agriculture; second, intangible goods, including continuous training and research; and third, the adaptation and improvement of existing structures, notably the thermal rehabilitation of buildings. The needs are so considerable that public financing alone will never be sufficient: as an illustration, the estimated global needs could reach USD 90 trillion over the next 15 years for new green infrastructure alone.15 Fortunately, the private sector is already showing a growing interest in green finance. I could cite many examples, including the sharp rise in the global green bond market, +78% in 2017,16 or the success of the issuance of France’s first green sovereign bond in January 2017 with EUR 7 billion allocated and total demand of more than EUR 23 billion, and supplemented yesterday. All this looks very promising… but it is still insufficient. The systematic oversubscription of green bonds at issuance is actually a sign that there is a lack of green financial products.
This is a strengthening compared to the earlier agreement among the euro area countries, changing the requirement from targeting the cyclically adjusted deficit to targeting an improvement in the structural deficit. When deciding the adjustment path, public investment and structural reforms can be taken into account. If structural reforms are to be taken into account, they should have a large and proven positive effect on the economy and there should be a safety margin to the 3% deficit floor. My view is that there is a possibility to use the newly defined MTOs in a wise manner, more closely adapted to the situation of the individual country. However, the scope for interpretation is so large that there is a high risk of lax and uneven implementation. The experiences of the first year indicate that some member states have more ambitious MTOs than required by the Pact. This is often countries with their own national budgetary rules, such as Sweden, which comprise MTOs. At the same time,  2  BIS Review 88/2006  there are other member states who need to do more to achieve their MTOs. The measures are often postponed too far ahead and are not sufficiently explicit and concrete. Changes in the corrective arm The third part of the changes refers to what happens when a country has an excessive deficit. As before, exemptions can be granted if the country is suffering from a severe economic downturn that it could not foresee, so called exceptional circumstances.