ECB Governing Council member Francois Villeroy de Galhau said he proposed to “decarbonizing the ECB’s balance sheet with a pragmatic, progressive and targeted approach to all corporate assets whether they be held on the central bank’s balance sheet as purchases or taken as collateral.”
Villeroy noted that the stagflationary nature of climate change was the reason to take it into account. It could challenge the price stability mandate by pushing up prices while weighing on the economy.
Though, he also noted, “the greening of central bank action is not about additional monetary policy easing but recalibrating our tools”.
