Weidmann on the other hand to align the bond purchase programs of the ECB more closely to “green” issues.
According to the President of the German Bundesbank, Jens Weidmann, the fight against climate change rests with the governments and not with the European Central Bank (ECB). “It is not the responsibility of the Eurosystem to punish or promote certain industries,” Weidmann wrote in a guest article in the Financial Times, which was published in advance on Thursday. He turned against proposals to gear the bond purchase programs of the ECB more to “green” issues.
Weidmann has a say in monetary policy on the ECB Council. Weidmann writes that for the bond purchase programs to take effect, they would have to be broadly based. The principle of market neutrality applies. “However, we are not entitled to correct market disruptions, political measures or failures.”
It is not the task of the central bank to compensate for the lack of political resolve on the subject of climate change, said Weidmann. The central bank has no “magic wand” to save the earth. It must concentrate on its primary goal of price stability. This is the best contribution that monetary policy can make to prosperity.
ECB President Christin Lagarde, on the other hand, wants to gear monetary policy towards the fight against climate change, according to the latest statements. She wants to examine the business of the central bank – including the bond purchase program – to see whether they are fighting climate change. The ECB would then be the only major central bank that wants to achieve sustainable goals with a bond purchase program.
