But what does this neutrality mean if there is a carbon bias in European capital markets because the relative price of carbon emissions is distorted? Central banks could explore how, within the boundaries of their mandates, they can redesign their monetary policy instruments to prevent such biases from occurring, and instead contribute to unlocking more green investments.
Business diversification and expansion helps them grow thereby leading to increase in job opportunities and in general promote economic development. Without adequate, timely and affordable access to formal credit, the customers are dependent upon either own equity or informal sources of credit, both of which are not only costly but perhaps unsustainable on a long-term basis.