Monetary policy

As extreme weather worsens, central banks must use their monetary and regulatory tools to actively accelerate the region’s decarbonisation and build resilience to climate risks.

Central banks and governments should work more closely on coordinated policies that will support the net-zero transition, say Sebastian Mang and Dominic Caddick of the New Economics Foundation.

In an increasingly hot and volatile world, central banks will need innovative approaches to guarantee price stability such as adaptive inflation targeting, say economists David Barmes and Luiz Awazu Pereira da Silva.

The time has come for the European Central Bank to consider green targeted longer-term refinancing operations, argue Aleksandar Simić and Stanislas Jourdan from the Sustainable Finance Lab.

The Jackson Hole symposium is the perfect opportunity for central banks to fully account for carbon emissions in their monetary policy toolkits, says Frank Van Gansbeke of Beyond Bretton Woods.

Many critical ecosystems could suddenly flip into new unstable states, causing economic turmoil. But financial regulators can work to avoid this, argue a team of economic and climate researchers.

Researchers Nicolás Aguila and Joscha Wullweber examine how the narratives used by the European Central Bank to justify its approach to climate change and the impact this could have on its green monetary policies.

The ECB’s new operational framework promises to incorporate climate into its structural operations, but the bank’s approach lacks speed and power, say Uuriintuya Batsaikhan and Jordi Schröder Bosch of Positive Money Europe.

Across the Asia Pacific region, there has been progress in aligning policies with global climate targets although gaps remain in monetary policy, supervision and elsewhere, says a team of sustainable finance experts from WWF.