Climate Financial Risks: Assessing Convergence, Exploring Diversity
Julia Anna Bingler,
Chiara Colesanti Senni and
Pierre Monnin | 9 December 2020
Monetary,
Discussion Notes | Tags:
Climate Risk,
Financial Supervision,
Monetary Policy Operations,
Risk Metrics Climate risks are now fully recognized as financial risks by asset managers, investors, central banks, and financial supervisors. As a result, the integration of climate risk metrics into risk management processes is moving up agendas worldwide. In that context, a rapidly growing number of market
... continue reading
Central Banks Must Upgrade Their Risk Management
Pierre Monnin | 23 November 2020
Monetary,
Blog | Tags:
Central Banks,
Climate Change,
Climate Risk The COVID-19 crisis is a stark reminder of how sharply asset values can shift. Amid a crashing demand for oil and gas, giant energy companies like BP, Chevron and Shell massively wrote down the value of their assets. And those that did not, like Exxon,
... continue reading
Central Bank Market Neutrality is a Myth
Chiara Colesanti Senni and
Pierre Monnin | 16 October 2020
Monetary,
Blog | Tags:
Asset Purchases,
Central Banks,
Climate Change,
Foreign Exchange Reserves,
Market Neutrality Christine Lagarde, the President of the European Central Bank (ECB), this week raised the critical question whether, in view of market failures, market neutrality should remain the guiding principle driving central banks’ policy portfolio management. Her spotlight on market neutrality underscores growing and overdue scrutiny
... continue reading
The Transition to a Sustainable Post-COVID Economy Requires an Urgent Shift in Central Bank Risk Management
Pierre Monnin | 10 July 2020
Monetary,
Blog | Tags:
Central Banks,
Climate Risk,
Covid-19,
Financial Regulation,
Monetary Policy Operations,
Precautionary principle The COVID-19 crisis is profoundly and durably transforming our economies. So will the transition to a low-carbon economy, which is necessary to contain the environmental crisis ahead of us. Shifting our economic system from its current state to a sustainable post-COVID version entails large and
... continue reading
The ECB Response to COVID-19
Pierre Monnin | 27 March 2020
Monetary,
Blog | Tags:
Asset Purchases,
Covid-19,
European Central Bank,
Helicopter Money,
Targeted Refinancing Lines Since the outbreak of the COVID-19 crisis, the European Central Bank (ECB) committed to inject an additional 870 billion euro – about 7% of the euro area’s GDP – into financial markets to address the significant challenge the pandemic poses to the economy. Through its
... continue reading
Shifting Gears: Integrating Climate Risks in Monetary Policy Operations
Pierre Monnin | 20 January 2020
Monetary,
Policy Briefs | Tags:
Asset Purchases,
Central Banks,
Climate Risk,
Collateral Framework,
Credit Risk The assets central banks purchase and accept as collateral are at the core of monetary policy implementation. Risk considerations play a crucial role in the selection of these assets: central banks seek to limit their holdings and eligible collateral to assets that minimize their risk
... continue reading
Climate Risk and Financial Systems of Latin America: Regulatory, Supervisory and Industry Practices in the Region and Beyond
Gianleo Frisari,
Matías Gallardo,
Chiemi Nakano,
Víctor Cárdenas and
Pierre Monnin | 18 December 2019
Monetary,
Discussion Notes | Tags:
Central Banks,
Climate Risk,
Financial Regulation,
Green Finance,
Latin America In Latin America and the Caribbean (LAC), regional supervisors and regulators have not yet explicitly included nor addressed climate-related risks in binding regulations and/or supervisory measures for the financial sector. This implies significant work ahead for the LAC financial sector to develop effective and complete
... continue reading
Climate Risks in Financial Assets
Emanuele Campiglio,
Pierre Monnin and
Adrian von Jagow | 4 November 2019
Monetary,
Discussion Notes | Tags:
Asset Prices,
Climate Risk,
Climate Stress Tests This note reviews the empirical evidence available in the academic literature about the impact of climate-related risks on financial assets. It addresses three main questions: does climate change already affect financial asset returns? What is the potential impact of future climate-related costs on financial asset
... continue reading
Distributional Impact of Unconventional Monetary Policies
Pierre Monnin | 25 June 2019
Monetary,
Discussion Notes | Tags:
Income Inequality,
QE The sustained application of accommodative monetary policies has led to concerns that they were aggravating inequality. The criticism has come from several quarters, from academics to private sector participants, from politicians to media and civil society organizations. Some argued that by boosting housing and stock
... continue reading
Prudential Regulation Can Help in Tackling Climate Change
Paola D'Orazio,
Lilit Popoyan and
Pierre Monnin | 13 February 2019
Monetary,
Blog | Tags:
Environment,
Financial Regulation Awareness of climate-related financial risks has been growing in the past years. Prudential frameworks however still fall short in reflecting them. Given the possible impacts of climate risks on financial stability, incorporating them into prudential regulation is rapidly moving up agendas both among academics and
... continue reading