Weekly roundup: BoJ to begin climate loans scheme and Biden picks climate-friendly regulator

September 24, 2021|Written by David Clarke|Reserve Bank of India, Banco Central do Brasil, Bank of Japan, European Central Bank, Federal Reserve

ECB can power green retrofit revolution, say civil society groups

The European Central Bank (ECB) can help to meet Europe’s climate targets by unlocking trillions of euros for building renovations, according to a recent op-ed co-signed by several leading civil society organisations.

In the article, they argue that this could be achieved via an adjustment to the ECB’s targeted longer-term refinancing operations. The scheme, which already offers cheap lending to banks under certain conditions, could offer an even lower rate of interest for their share of loans dedicated to building renovations, the authors say.


Brazil’s banks told to begin climate stress tests

Brazil’s central bank announced new rules making it mandatory for banks to incorporate climate change-related risks, such as droughts, floods and forest fires in their stress tests, starting in July 2022. Otavio Damaso, director of the Banco Central do Brazil, said the new regulation aims to avoid potential financial instability stemming from climate-related risks. Banks will also be required to disclose climate-related information in accordance with the Task Force on Climate-Related Financial Disclosures, bringing the country in line with other G20 economies.


Reserve Bank of India deputy governor outlines approach to climate risk

The deputy governor of the Reserve Bank of India spoke about the central bank’s measures to address climate risk in a speech published on Monday. These include looking at integrating climate-based risk into financial stability monitoring, building in-house capacity on assessment and monitoring of climate risk and coordinating with other financial regulators related to a transition towards a low-carbon economy.


Biden to tap climate advocate for OCC role

President Joe Biden is expected to nominate Professor Saule Omarova of the Cornell Law School to run the Office of the Comptroller of the Currency, it was reported on Wednesday. Omarova has written about the need for greater government intervention to drive finance towards the green transition. The group Evergreen Action said Biden has “chosen someone who isn’t afraid to take on Wall Street and has supported bold, federal clean energy investments on climate”.


Adverse weather a factor in BCB rate rise

The Banco Central do Brazil included a reference to the effects of adverse weather conditions on food and fuel prices and electricity bills in the justification for an interest rate rise this week. This is the latest central bank to mention weather as a factor, after similar references in monetary policy reports published by the Banco de México and the Reserve Bank of Malawi.


Bank of Japan to disperse first loans under new climate scheme

The Bank of Japan announced this week it will begin disbursing loans in late December under a new scheme targeting activities aimed at combating climate change, as it seeks to align itself with the global effort to reduce emissions. The central bank has begun accepting applications from financial institutions wishing to take part in the new scheme. After the December disbursement, loans will be offered about twice a year, the BoJ said in a statement.

This page was last updated September 24, 2021

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