Climate change and climate policies can affect all of these mandates, as they may have an impact on macroeconomic and financial variables such as output, inflation, interest rates and asset prices, while altering the underlying structure of our economies. It is therefore essential for central banks to gain a full understanding of these repercussions for the functioning of the economy and the financial system.
As a very recent example in this respect, I would like to highlight the ShortTerm European Paper – or STEP – initiative, led by ACI – the Financial Markets Association and the European Banking Federation.