Central Banks’ Green Goals Are Raising Red Flags
There is growing concern that central banks’ balance sheets, which have ballooned after a decade of asset-purchase programs, are skewed toward holdings that impede the transition to a green economy. But there is also deep disagreement about how policymakers should respond.
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LONDON – It might seem surprising that, amid all the challenges central banks are facing nowadays, their contribution to combating climate change has risen close to the top of policymakers’ agenda. But a closer look reveals why: central banks’ balance sheets, which have ballooned after a decade of asset-purchase programs (so-called quantitative easing) may be skewed toward holdings that impede the transition to a green economy.