See de Guindos, L. (2021), “Shining a light on climate risks: the ECB’s economy-wide climate stress test”, The ECB Blog, 18 March. 11. See Allen, T., et al. (2020), “Climate-related scenarios for financial stability assessment: an application to France”, Working Paper Series, No 774, Banque de France. 12. See Lagarde, C. (2020), “Climate change and the financial sector”, 27 February. 13. While there is widespread consensus about central banks’ potential role in mitigating the consequences of climate risks, a number of concerns have also been raised. Some refer to the possible interference with the primary mandate, others to the politicisation of monetary policy and the danger of mission creep, with potential negative ramifications for central bank independence and monetary policy effectiveness. See, for example, Cochrane, J. (2020), “Challenges for central banks”, October. 14. This includes various members of the ECB’s Governing Council. See, for example, Knot, K. (2021), “Getting the Green Deal done: how to mobilize sustainable finance”, 11 February; Villeroy de Galhau, F. (2021), “The role of central banks in greening the economy”, 11 February; de Cos, P.H. (2021), “Economic and financial policy geared to climate goals”, 25 February; Weidmann, J. (2021), “Climate risks, financial markets and central banks’ risk management”, 2 June. 15. See NGFS (2021), “Adapting central bank operations to a hotter world: Reviewing some options”, March; Villeroy de Galhau, F. (2021), ibid. 16. See Hauser, A.
See, for example, de Greiff, K., Delis, M. and Ongena, S., (2018), “Being stranded on the carbon bubble? Climate policy risk and the pricing of bank loans”, Discussion Paper Series, No. 12928, Centre for Economic Policy Research (CEPR), May; Altunbas, Y., Marques, D., Reghezza, A., Rodrigues-Acri, C., and Spaggiari, M., (2020), “Do banks fuel climate change?”, Working Papers Series, ECB, forthcoming. 6. See de Haas, R. and Popov, A. (2021), “Finance and green growth”, European Banking Center Discussion Paper Series No 2018-001. 7. See Flammer, C. (2021), “Corporate green bonds”, Journal of Financial Economics, pp. 20–39. However, evidence on the impact of green bonds on carbon emissions is mixed: other studies have found that the issuance of green bonds is not associated with a decrease in the carbon emissions at the firmlevel. See Ehlers, T., Mojon, B. and Packer, F. (2020), “Green bonds and carbon emissions: exploring the case for a rating system at the firm level”, BIS Quarterly Review, September. 8. As stressed by Ignazio Visco at the recent Green Swan Conference hosted by the Bank for International Settlements (BIS), these externalities are particularly relevant as emissions entail spill-overs to other markets and countries. Such spill-overs create an additional need for coordinating mitigation policies across countries to avoid undue delays in countering the effects of climate change. See Visco, I. (2021), “The conference messages in light of the G20 Presidency programme”, 4 June. 9. ECB and ESRB (2020), “Positively green: Measuring climate change risks to financial stability”, June. 10.