Volker Wieland on dealing with climate risks in monetary policy (FAZ)

Prof. Volker Wieland sees a consideration of climate risks in the risk management of the European Central Bank (ECB) as less sensitive from a monetary policy point of view than the targeted purchase of green bonds. In an interview with the Frankfurter Allgemeine Zeitung (F.A.Z.) he said: "It seems perfectly legitimate to me that the ECB also takes climate risks for bonds into account in its risk management.

This, he said, is very different from specifically buying green bonds. "The big question is: How does the ECB know which bonds to exclude because of high climate risks? If the rating agencies can't tell, where would the ECB get that knowledge?"

According to Wieland, it should be easier for the central bank to identify financial risks from climate policy, such as changes in fossil fuel prices, rather than longer-term physical risks from climate change itself, the F.A.Z. writes.

FAZ: "EZB vor 'grünen' Kriterien für ihre Anleihekäufe"