The Greenness of Central Banking: Rethinking the Macroprudential Framework

Central banks may further strengthen their efforts towards a green and sustainable transition, according to this paper from PwC Switzerland. The world has never been more open to new ideas, ideals and values as at this current point in time, the author observes.

The ‘greening role’ of central banks is very welcome from an economic and society perspective, but is also in the banks’ own interest, the paper argues. Financial stability, and with it a functioning monetary policy, can only be ensured if central banks take into account climate-related risks, the author goes on to say.

In the future, central bank mandates may be expanded, and the banks may even take a trailblazer position, perhaps tying the classical goals of monetary policy with an equally weighted requirement for those goals to be implemented without harm to the environment.