Bundesbank President Jens Weidmann speaks out in favor of considering climate-related financial risks in monetary policy.
Jens Weidmann writes in a guest article that the European Central Bank should take into account the climate-related reporting obligations of issuers when buying securities. But politicians are also responsible, for example by increasing CO2 taxes.
Bundesbank president Jens Weidmann advocates considering climate-related financial risks in the monetary policy decisions of the European Central Bank (ECB) The Eurosystem should only consider “buying securities or accepting them as collateral for monetary policy purposes if their issuers comply with certain climate-related reporting obligations,” Weidmann wrote in a guest article for the Financial Times. He also suggested that central banks should only use ratings from agencies that adequately account for climate-related financial risks.
However, governments must also do their part in the fight against climate change, for example by increasing taxes on CO2 or limiting emissions through an emissions trading system, explained Weidmann. Such sector-specific regulation is not the responsibility of the Eurosystem. Weidmann will speak on Friday at the European Banking Congress on the role of central banks in combating climate change.