This paper investigates the impact of central banks when supporting policies aiming at greening the financial system. The July 2021 Monetary Policy Strategy Review of the European Central Bank unexpectedly dedicated a whole workstream to climate change. The announcement had a significant effect...

As it is becoming clear that climate change will exert a major impact on inflation, economic growth, and financial system stability, central banks and financial regulators have increasingly recognized that they can no longer ignore climate change and other environmental issues. In general,...

Timely and effective climate action is a precondition for the stability of the global financial system and for long-term, inclusive prosperity. Because the Federal Reserve and other central banks share responsibility with legislative and regulatory authorities and other experts for maintaining...

Although there are numerous tools theoretically available to central banks (depending on their current mandates) to address systemic financial risks posed by climate change and to green the financial sector, their use has been limited to predominantly emerging and developing countries most...

Climate change has exacerbated extreme weather events; global warming and its effects have been described as unequivocal and unprecedented. It has been recognized that transitioning to a low carbon economy will require large scale transformation. We are witnessing a period in which there are...

The awareness about climate-related financial risks is gaining momentum both in the policy and academic debates. The role of countries' institutional dimension and central bank governance structures in the adoption of green prudential regulation is, however, overlooked in the current discussion....

While climate change was largely tackled by government policies in the past, central banks are increasingly grappling with the risks climate change poses. They are evaluating their operational policies to reflect these risks and the transition to a net-zero economy. This paper explores the...

We develop a two sector incomplete markets integrated assessment model to analyze the effectiveness of green quantitative easing (QE) in complementing fiscal policies for climate change mitigation. We model green QE through an outstanding stock of private assets held by a monetary authority and...