Markus K. Brunnermeier, Jean-Pierre Landau, (2020), Central banks and climate change, VoxEU, 15 January
Central banks have been called on to contribute to fighting climate change. This column presents a framework for thinking about the issue and identifies some major trade-offs and choices. It argues that climate should be a major part of risk assessments and that capital ratios could be used in a proactive way by applying favourable regimes to ‘green’ loans and investments. It also suggests that central banks may want to take several climate change-related aspects into account when designing and implementing monetary policies. However, the central bank should retain absolute discretion to interrupt any action if its first-priority objective – price stability – were to be compromised.
- Alexander Lehmann, (2020), “European green finance is expanding, a discount on bank capital would discredit it“, Bruegel, 15 January
- Andrew Watt, (2020), » The European Green Deal: will the ends, will the means?», Social Europe, 14 January