Supervisory follow-up Let me now outline the next steps that the ECB plans to take to follow up on the results of our assessment of banks’ C&E disclosures. We have sent individual feedback letters to all banks under our direct supervision, setting out the key gaps in their disclosures and conveying our explicit expectation that they will take decisive action to address these gaps. In doing so, banks will ultimately ensure that their risk profile is transparently and comprehensively reflected in the information they disclose to the public. Addressing such gaps will also mean banks are well prepared to meet impending technical requirements. As I mentioned, the consequences of non-compliance with minimum transparency standards are only going to increase for banks, as legal and reputational risks are starting to materialise for banks which fail to step up the quality of their disclosures. More and more, clients, investors and other market participants want meaningful, comprehensive information on the climate-related actions of their banks. That way, they can make conscious, informed decisions about where their money goes. Moreover, failing to disclose exposure to risks, including C&E risks, constitutes a breach of the Capital Requirements Regulation. As such, we stand ready to use the full array of supervisory tools at our disposal to ensure banks’ C&E disclosures are up to our standards, and ultimately that eligible banks are prepared for the new regulatory requirements.
There were signs of that last week when the minutes from April showed that I had not voted with the Board’s majority. But as observers and market players become more accustomed to how we operate, such differences of opinion are likely to attract less attention. Still, monetary policy signalling clearly cannot be arranged in quite the same way as before and in this respect we will presumably become more like the ECB and the Bundesbank, where individual statements do not automatically constitute a collective signal from the central bank. For those who are interested in following us and our assessments, however, we strive to provide a good foundation by publishing — at intervals of approximately six weeks — either an Inflation Report or a lengthy press notice on the majority view of inflation prospects. Fiscal policies in the euro area Let me now turn to the conduct of fiscal policy in the euro area. A judicious monetary policy is not sufficient to ensure that the monetary union functions properly. The single currency will make the national economies more interconnected than before. The formation of fiscal policy in one country will affect the overall picture of economic prospects and thereby monetary policy. In the Maastricht Treaty the countries accordingly agreed on certain common rules for economic policy and these have been fleshed out with additional legislation and political agreements. Besides fixed and binding undertakings for each country, there are regular common processes for producing more general guidelines and standards for economic policy.