Abstract
The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years. This Perspective presents the key controversies and discusses potential research and policy avenues for the future. Developing a comprehensive analytical framework to assess the potential impact of climate change and the low-carbon transition on financial stability seems to be the first crucial challenge. These enhanced risk measures could then be incorporated in setting financial regulations and implementing the policies of central banks.
Highlights
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The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years
Supporting the low-carbon transition via a ‘green Quantitative Easing (QE)’ has been repeatedly rejected by central bankers.[9] the European Central Bank (ECB) allocates around 10% of its Public Sector Purchase Programme to bonds issued by
Summary
Original citation: Campiglio, Emanuele and Dafermos, Yannis and Monnin, Pierre and Ryan-Collins, Josh and Schotten, Guido and Tanaka, Misa (2018) Climate change challenges for central banks and financial regulators. The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years. This Perspective presents the key controversies and discusses potential research and policy avenues for the future. Developing a comprehensive analytical framework to assess the potential impact of climate change and the low-carbon transition on financial stability appears to be the first crucial challenge. These enhanced risk measures could be incorporated in setting financial regulations and implementing central banks’ policies.
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