Green finance, regulation and monetary policy

The dynamic links between the financial system and environmental sustainability have rapidly moved to the center of the public debate. Terms like ‘sustainable finance’, ‘green bonds’ or ‘climate-related risks’ are increasingly spread buzzwords among policy-makers, financial practitioners and civil society. The topic exhibits several layers of complexity. First, climate change creates substantial new uncertainties for economic agents, whose repercussions need to be studied. For instance, the potentially large losses faced by insurance firms are pushing them towards a better assessment of physical risks. For investors, climate change might pose both risks and opportunities. Existing investments might dramatically lose in value, some firms might vanish, while others may enter and flourish. Green investment thus goes far beyond ethical behavior and may have very concrete financial drivers. Second, financial and banking regulation can influence the allocation of finance in environmentally friendly or harmful economic activities. Third, central banks’ monetary policy operations might unintentionally favor environmentally harmful activities. New empirical research findings identify such unintended effects and show avenues to correct for them. Finally, innovative green financial instruments might actively encourage investment in climate-saving sectors, R&D and clean technologies. The conference provides an overview of the current state of research and policy debates on these themes. Non-technical presentations encourage discussions among academics, policy makers and financial practitioners.

Friday, May 4, 2018, 08:00 a.m.

Oesterreichische Nationalbank
Otto-Wagner-Platz 3
1090 Vienna