A zero-interest lending programme launched by the Bank of Japan aims to boost low-carbon projects such as geothermal and solar energy. But it faces disclosure and mandatory requirement challenges, says Sayuri Shirai of Keio University.
Faced with rising fossil fuel inflation and growing energy insecurity, civil society groups are calling on the ECB to incentivise bank lending for energy-saving housing renovations through the introduction of a green discount rate.
ECB president Christine Lagarde has said she hopes the central bank can introduce a green targeted lending facility, but has indicated the issue may be controversial among the governing council.
Buildings generate over one-third of the EU’s CO2 emissions, and economists from the Bank of Italy and Ricerca sul Sistema Energetico have developed a banking regulation tool which they say will help accelerate the green transition in the sector.
China’s green finance pilot zones are a unique experiment in tailoring monetary policies to diffierent social, economic and environmental situations, explains Mengwei Sha of the Beijing Institute of Finance and Sustainability.
An environment risk weight tool that regulators can use immediately, Omfif calls for global sustainability baseline, a Mongolian sustainable finance roadmap, and more from this week in green central banking.
Climate-related financial risks remain “greatly underestimated”, fossil fuel assets must become stranded and stronger regulation is needed, finds the latest IPCC climate mitigation assessment.
Faced with huge margin calls, energy companies and traders are lobbying central banks for “emergency liquidity funding” for banks clearing energy trades, says the European Federation of Energy Traders.
A senior BoE economist has called for lenders to disclose the ratio of energy-efficient mortgages they hold, allowing investors and regulators to assess exposure to energy price shocks and climate-related transition risks.
Despite inflationary pressures associated with European dependence on Russian fossil fuels, the ECB has offered no support for EU efforts to reduce imports and switch to more stable and secure renewable energy sources.
As inflation pressures mount and the ECB governing council prepares to meet, a discriminating approach may be the only option to reduce fossil fuel price and financial instability.
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