19 Nov 2019, 13:40
Julian Wettengel

Central banks lack mandate to decide which investment is good for climate – opinion

Süddeutsche Zeitung

Central banks should not actively engage in climate policy as they lack both the expertise and the mandate to decide which investments make sense from a climate protection point of view, writes Claus Hulverscheidt in an opinion piece in Süddeutsche Zeitung. Banks can only deliver on their core function to secure stable prices at high employment if they are free from political pressure and concentrate on a narrow set of tasks, he writes. "If, on the other hand, they are also involved in social, financial or environmental policy, the question arises as to how it can be that an institution can have a say in the fate of people, governments and states whose leading representatives have not been elected by anyone." If lawmakers want bonds of oil companies to be assessed differently from those of wind park operators, "then they better enact appropriate regulations instead of transferring decisions to the central banks”, writes Hulverscheidt.

In October, Jens Weidmann, president of the Deutsche Bundesbank, Germany's cental bank, said the institution had to maintain market neutrality and could not become a proactive advocate of climate action. New European Central Bank (ECB) President Christine Lagarde, however, said tackling climate change would become a “mission-critical” priority at the ECB.

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