The article reviews the literature on the relationship between climate change and central bank policies. Central banks conduct monetary policy and are responsible for macroprudential supervision. The article focuses on the consequences of transition and physical risks for financial stability and...

We study the preferential treatment of green bonds in the Central Bank collateral framework as an environmental policy instrument. We propose a macroeconomic model with environmental and financial frictions, in which green and conventional entrepreneurs issue defaultable bonds to banks that use...