Visegrád central bankers meet to discuss green transition

July 15, 2021|Written by Graham Caswell|Narodowy Bank Polski, Czech National Bank, National Bank of Slovakia, Magyar Nemzeti Bank

Central bank governors from the Czech Republic, Hungary, Poland and Slovakia met today to discuss the transition to an environmentally sustainable economy as part of a conference focusing on a green recovery from the Covid-19 pandemic.

The meeting of the Visegrád (V4) Group governors was hosted by the Magyar Nemzeti Bank (MNB), and follows the publication of the Hungarian central bank’s green monetary policy strategy earlier this week.

MNB governor György Matolcsy introduced the half-day conference by recalling central Europe’s difficult transition to a market economy 30 years ago, and comparing it to the transition required to meet emissions targets and other sustainability goals.

“Just three decades ago it was a ‘must’ for all four countries to leave the Soviet bloc and to build up democracies and the market economy,” Matolcsy said. “It is also, again, a ‘must’ to build up – gradually and not via shock therapy – a new green economy.”

Peter Kažimír, governor of the National Bank of Slovakia, warned of sudden developments by quoting economist Rüdiger Dornbusch, who said “the crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought”.

Kažimír is the only V4 governor on the European Central Bank (ECB) governing council, and he also outlined the ECB’s strategy review, published last week.

“We, the ECB Governing Council, have recognised that climate change has profound implications for price stability,” he told the conference. “We are facing the critical moment… and the toll for inaction is increasing every moment,” he said. He also warned that a voluntary approach is not enough.

Conference panel discussions focused on the role of the central banks in combating climate change and on a ‘green renewal’ following the Covid-19 pandemic, with most participants outlining the climate and environment-related actions of their own central banks.

The MNB recently launched a green home programme offering targeted and preferential refinancing to banks lending for energy-efficient housing, as well as a green mortgage bond purchase programme. Both programmes are part of the bank’s new green monetary policy strategy.

This page was last updated July 15, 2021

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