Lastly, our third message was that a “selective default” should be avoided. However, in the event of such a default, governments would have to recapitalise the banks and provide credit enhancement for the collateral accepted by the ECB for its refinancing operations.
Several pockets of green initiatives have been launched prior to the formalization of the Sustainable Central Banking Program. These include, among others, the participation in the Green Bond Fund launched by the Bank for International Settlements as part of sustainable investing in reserve management.