Targeting a sustainable recovery with Green TLTROs

Jens van 't Klooster and Rens van Tilburg

No 2bx8h, SocArXiv from Center for Open Science

Abstract: Since their introduction in 2014, the European Central Bank’s Targeted Longer-Term Refinancing Operations (TLTROs) have become ever larger and ever more attractive for banks. As they increasingly drive bank lending, TLTROs often enable unsustainable investments. This report proposes Green TLTROs, which are refinancing operations that provide banks with cheap funding if they lend in accordance with the EU’s taxonomy of green activities. We discuss the legality of such a market-based programme and show that it is compatible with a level playing field between banks and the singleness of monetary policy. We outline several possible technical designs of the Green TLTROs and suggest a pilot programme for energy efficient housing that can quickly be implemented.

Date: 2020-12-18
New Economics Papers: this item is included in nep-eec, nep-ene, nep-env and nep-mon
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:2bx8h

DOI: 10.31219/osf.io/2bx8h

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