Can unconventional monetary policy contribute to climate action?

Alice Eliet-Doillet and Andrea Maino
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Alice Eliet-Doillet: Ecole Polytechnique Fédérale de Lausanne
Andrea Maino: University of Geneva

No 22-35, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: This paper investigates the impact of central banks when supporting policies aiming at greening the financial system. The July 2021 Monetary Policy Strategy Review of the European Central Bank unexpectedly dedicated a whole workstream to climate change. The announcement had a significant effect on the pricing and issuance of green bonds in the Eurozone. We find that ECB eligible green bonds’ Yield-to-Maturity decreased following the announcement when compared to equivalent conventional bonds. Firms incorporated in the Eurozone reacted to the announcement by increasing the amount of green bond issued, for both the segments of ECB-eligible and non-ECB-eligible green bonds.

Keywords: Climate Change; Central Banks; Green Bonds; Carbon Emissions; Quantitative Easing; Monetary Policy; ESG (search for similar items in EconPapers)
JEL-codes: E52 E58 G12 Q58 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-ene, nep-env, nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2235

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