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Christine Lagarde, head of the ECB of the European Central Bank, often says that she wants to be able to look her grandchildren in the eye. Andrew Bailey, who has succeeded climate profile Mark Carney as CEO of the Bank of England, is also happy to talk about renewable change. Most recently in an ambitious talk this week.
But on Thursday, they were all run over by Stefan Ingves, who has never had a high tail on the climate issue and who also attenuates the Riksbank’s new green line.
What happened?
A little world news it was hidden in this week’s interest rate announcement. In the future, the Riksbank will not touch corporate bonds that violate certain sustainability criteria. Brown companies are excluded from the support programs.
This is the same problem that the ECB, the Bank of England and other central banks are grappling with but have not set foot on. “Green QE” is sometimes called, although you mean slightly different things. The Riksbank variant doesn’t go that far.
Within the ECB, the issue is sensitive. The German Bundesbank and Chief Jens Weidmann are skeptical, while Lagarde and the bearer of arms Isabel Schnabel push. They are also enthusiastically received by the environmental movement. At the Bank of England, plans to protect the bank’s measures against the weather have been delayed by the pandemic. What has received criticism.
To the Riksbank it seemed everything is very simple. Stefan Ingves did not mention the grandchildren or Mother Earth at Thursday’s press conference, but said the issues were “technical.”
This is probably not how your European colleagues would describe it. The issue is political fervor. And, at the same time, it is not easy for central banks. Nowhere in the mandate of the Riksbank or the ECB is the climate issue mentioned. No one has assigned them an explicit mission to intervene. The tools they have are also forceful.
But after all, central banks have enormous power over financial markets, which in turn control investment in the real economy. And the EU Treaty actually states that monetary policy must “support general economic policy within the Union.” You might think that the Union emissions target is relevant.
Sweden’s climate targets are also enshrined in our legislation. It would be quite strange if the Riksbank completely ignored the issue. It must have some attitude.
What the Riksbank carries the step now, before the others, has its explanations. One reason is that the problem is simpler in Sweden. There is a really unsustainable shortage of companies in Sweden. No oil giants, no coal mines.
Therefore, Riksbank policy may not mean much in practice. Unfortunately, we don’t seem to know which companies may be excluded when you go out to buy loan paper.
Another reason this is happening now is probably named Anna Breman. Both before and after taking over the Riksbank’s Executive Board nearly a year ago, he has lobbied. If so, you’ve been feeling pretty lonely. The debate in Sweden has been great. But that is likely to change now.
Read more: DN interviews Anna Breman
