The upcoming ECB Forum on Central Banking in Sintra will place significant emphasis on climate change risks and their impact on monetary policy. One of the academic papers that received an award explores how the transition to a net-zero emissions economy can influence the transmission of monetary policy. This research builds upon ECB President Lagarde’s recent remarks at the Future Investment Initiative in Riyadh, where she warned about the severe consequences if societies fail to effectively address climate change, stating that “we will be toasted, roasted, and grilled.” The ECB has already taken steps since mid-2022 to incorporate climate change considerations into its monetary policy strategy. This includes considering climate change when making corporate bond purchases, adjusting the collateral framework, implementing disclosure requirements, and enhancing risk management.
Learn more here: https://www.allianz.com/en/economic_research/publications/specials_fmo/2023_06_27_Green-monetary-policy.html
