Since 2005, the emission trading system, also called carbon market, is at the heart of the European strategy to reduce greenhouse gas emissions.
This device that covers around 45% of carbon emissions is based on the simple principle of "polluter pays".
The entities concerned, mainly the most polluting industrial sites, but also the intra-EU airlines, are given emission allowances by public authorities. These are tons of carbon which they can emit into the atmosphere every year.
When they reach the limit, they have to obtain additional rights on the markets or bilaterally. This has a cost. So it is a financial incentive to adopt less polluting production methods based on renewable energies for instance.
According to the latest figures from the European Banking Authority, the ratios of non-performing loans in the Spanish, Italian and Portuguese banking systems reached record lows in the second quarter of 2022. It also appears that their cost of risk remains relatively low following the sharp increase in 2020. However, the cost of risk for Southern European banks is likely to increase again in the coming quarters against a backdrop of a slowdown in economic activity linked to high inflation, rising interest rates and higher energy prices.
