Paul Hiebert, head of Systemic Risk & Financial Institutions Division at European Central Bank, returns to Kopi Time to talk about ECB’s views on financial stability. We go over the pandemic’s impact on the financial system, interest rate sensitivity of various sectors, corporate solvency risks, and household balance sheets. We then move on to longer dated risks, of which climate change is the one that looms the largest. Paul shares with us the findings on measuring and modelling climate change impacts for the European Union, exposure mapping, data and methodological challenges, and the need to deal with greenwashing. From companies to global regulators, the intersection of climate change and financial stability has forced a steep learning curve; Paul underscores that much has been done, but a lot more remains to be accomplished.