ECB Encouraged to Create New Green Bank-Lending Program

As the ECB has started accepting sustainability-linked bonds and broadened the universe of green assets they accept; Positive Money Europe has recommended a green bank-lending program to revive the economy in the wake of the COVID-19 pandemic. ECB Executive Board Member Isabel Schnabel indicated in a recent speech the ECB could require bond issuers to be transparent about climate risks as a precondition for their assets to be part of purchase and lending programs. Green Total Long-Term Refinancing Operations (TLTROs) are said to address market failures and incentivise green lending and lead to capital allocation conducive to long-term price stability.