Greening Central Bank Refinancing Operations

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Central bank lending to commercial banks through refinancing operations is a core pillar of the monetary policy toolbox of central banks worldwide.

In that context, several central banks have introduced elements of targeting their refinancing operations to specific economic segments or activities. The use of such targeted refinancing operations (TROs) has been a long-running feature of monetary policy across Asia and has gained further prominence following the financial crisis to address market failures and support financial flows in alignment with policy objectives.

With that in mind, and in view of the growing recognition of climate risks for financial markets in the region, central banks across ASEAN+3 have started introducing TROs aimed at supporting the transition towards a lower-carbon economy and an affordable, secure and clean energy future. TROs offered by the Bank of Japan and the People’s Bank of China are cases in point.

We are pleased to welcome Marthe Hinojales to provide an overview of how central banks have started integrating green considerations into monetary policy in general and their refinancing operations in particular across ASEAN+3; Aziz Durrani to discuss the greening of collateral frameworks as a central pillar in that context; and Muhammad Qaisar to discuss the different design elements of greening refinancing operations.

  • Marthe Hinojales is a Senior Economist in AMRO’s Regional Surveillance Team, where she works mostly on issues concerning trade, supply chains, and structural issues in ASEAN+3, including climate change. She is co-author of AMRO’s flagship report for 2023, ASEAN+3: On the Road to Net Zero, which looked at the challenges and opportunities from the net zero transition and the role of finance for the ASEAN+3 region.

    Aziz Durrani leads the Technical Assistance function at AMRO. His work includes advising on climate and nature related risks and on green and sustainable finance policies. Aziz was previously a Senior Technical Risk Specialist at the Bank of England where, amongst other things, he managed the Bank’s collateral refinancing expansion program following the GFC.

    Muhammad Qaisar is a Fellow at the Council on Economic Policies (CEP), specializing in monetary policy and financial supervision with a focus on Asian countries. He holds a Master’s degree in Economics from Quaid-i-Azam University, Pakistan, and a Master’s in Public Policy from the National University of Singapore. Muhammad has extensive experience managing refinancing schemes in Pakistan and is currently based in the United Kingdom.

  • The recording will be posted shortly after the event