In January 2020, Christine Lagarde committed the European Central Bank (ECB) to start a strategy review process. The ECB President ensured that the review would look at all ways in which the ECB could contribute to the fight against climate change. A debate on how to incorporate climate-related risks in quantitative easing programmes is underway. Similar reflection is needed on the so-called Targeted Longer-Term Refinancing Operations (TLTROs), under which the ECB currently lends €1,500 billion to banks, at negative interest rates.
In a recent report for Positive Money Europe and Sustainable Finance Lab, Jens van ‘t Klooster and Rens van Tilburg explain how the ECB can incentivise banks to lend money for green investments through its TLTRO program. The authors show that there is no legal obstacle to Green TLTRO and that the ECB can start the programme today by making use of the EU taxonomy on green financial assets. As such, according to the authors, it would be a massive wasted opportunity not to consider this option during ECB’s strategy review.
Consult the report here: https://www.positivemoney.eu/2020/09/green-tltros/.
Join us for an interactive webinar with Jens van ‘t Klooster, helping us understand the vision behind the green TLTRO proposal. Then Isabel Vansteenkiste from the ECB will offer her thoughts from the central banking point of view, and Frederik Ducrozet will further comment on the proposal from a bank perspective. The event will be chaired by Claire Jones from the Financial Times.
Jens van ‘t Klooster, FWO Postdoctoral Fellow at the KU Leuven and a member of the research group “A New Normative Framework for Financial Debt” at the University of Amsterdam.
Isabel Vansteenkiste, Deputy Director General for Monetary Policy at the European Central Bank (ECB).
Frederik Ducrozet, Senior Economist at Banque Pictet & Cie SA, Research Division.
Chair: Claire Jones, Global Economy Reporter, FT Alphaville.