MNI BRIEF: ECB Should Green Bond Buys, Collateral - Schnabel
Green transition shouldn't be delayed by tighter finance conditions, ECB Executive Board member Isabel Schnabel says.
Tighter financing conditions should not be used by Governments as a reason to further delay the green transition, ECB Executive Board member Isabel Schnabel said Tuesday, adding that the ECB should consider tilting asset purchases towards green supranational issuance and 'green' its collateral framework to meet EU climate change obligations.
Fiscal policy must take the lead in fighting climate change, but there is no evidence of funding shortages for green investment projects, Schnabel said. “By bringing inflation down in a timely manner, monetary policy restores the conditions that are necessary for the green transition to thrive.”
Green targeted lending operations [TLTROs] could be considered when policy needs to become expansionary again, Schnabel said. The Executive Board member made no reference to the current monetary policy debate.