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30.03.2021, 10:17

ECB’s Governing Council member Knot: ECB should not be responsible for developing new benchmarks for climate-friendly QE

  • ECB could skew its bond purchases towards greener assets but should not be responsible for developing new benchmarks for climate-friendly quantitative easing
  • That’s something we should absolutely consider
  • My preference would be for us not to come up with allocation ourselves, but that there would be somewhat better benchmark developed outside central banking world that we could then use to tilt these purchases
  • ECB could act as catalyst in creating new methodologies, but more corporate disclosure is required and credit rating agencies also need to incorporate climate risk in their assessments
  • This is all about imperfect pricing, a sort of market failure, and we could only get better pricing of climate-related risk once there is more data, more information, out there
  • That’s why we stimulate the harmonisation of disclosure standards

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