Abstract
Central banks can potentially influence the investment decisions of private financial
institutions, which in turn will create incentives towards green technology adoption
and development of lower emission business models. This paper examines how
central bankers are engaging with the green transition agenda. To guide the efforts, the paper mobilizes the Money View literature. This enables a comparative
assessment of different monetary policy options. The main finding is that a
promising way forward for Green Central Banking is to adopt a dual strategy of
expanding collateral eligibility through positive screening and widening haircut
spreads to change relative incentives in favor of green over brown assets.
institutions, which in turn will create incentives towards green technology adoption
and development of lower emission business models. This paper examines how
central bankers are engaging with the green transition agenda. To guide the efforts, the paper mobilizes the Money View literature. This enables a comparative
assessment of different monetary policy options. The main finding is that a
promising way forward for Green Central Banking is to adopt a dual strategy of
expanding collateral eligibility through positive screening and widening haircut
spreads to change relative incentives in favor of green over brown assets.
Original language | English |
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Place of Publication | Roskilde |
Publisher | Roskilde Universitet |
Number of pages | 26 |
ISBN (Print) | 978-87-7349-042-6 |
Publication status | Published - 1 Mar 2022 |
Series | SECO Working Paper Series |
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Number | 3 |
Volume | 2022 |
ISSN | 2446-337X |