Currently, private sector assets are purchased in accordance with the “market neutrality” principle, which implies that those firms that issue more bonds tend to benefit more from our asset purchase programmes, ignoring broader portfolio rebalancing effects. In other words, the “market neutrality” principle disregards any malign welfare effects that may arise if those that issue more bonds have a larger carbon footprint.
It may therefore directly counteract efforts by the Union to reduce greenhouse gas emissions and accelerate the transition towards a green economy. Taken together, therefore, our mandate requires a careful assessment of the extent to which the ECB can and should “green” its monetary policy operations. This is what we are currently doing under our monetary policy strategy review.