Swiss Central Bankers Have Climate Change on Their Minds
The Swiss National Bank is looking at how climate change can affect growth and inflation, as well as the stability of the financial system.
With climate change issues high on the public agenda across Europe, central bankers have begun to examine what it means for policy making. European Central Bank President Christine Lagarde has identified areas were her institution can take action such as by incorporating climate risks into economic models and favoring green assets in the pension portfolio.
The central bank is working with its peers to “address monetary policy, financial stability and investment policy aspects,” SNB President Thomas Jordan said in Bern on Thursday. “We also regularly exchange information on climate-related issues with other institutions.”
With its mountain of foreign exchange reserves accrued due to interventions to weaken the franc, the SNB is frequently called upon to adjust its asset management policy to help achieve other objectives. While the SNB already excludes some companies on ethical grounds, officials are skeptical of greening the portfolio for fear of impinging upon market neutrality.
“We regularly review changes in the risk landscape and factor them into our investment policy where necessary,” SNB Governing Board Member Andrea Maechler said. Still, “given the monetary policy requirements of our mandate, we are convinced that the approach we have chosen is appropriate.”
The SNB is a member of the Network for Greening the Financial System, a group of more than 45 central banks and supervisors focused on contributing to fighting climate change.
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