Three tales of central banking and financial supervision for the ecological transition

Bibliographic Data

ID12929462
AuthorsWilliam Oman (0009-0003-7779-884X, International Monetary Fund), Mathilde Salin (0000-0002-0505-3174, Centre National de la Recherche Scientifique), Romain Svartzman (0000-0001-6792-5954, Banque de France, corresponding author)
Year2024
Volume15
Issue3
Publication date2024-01-24
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueWiley Interdisciplinary Reviews Climate Change (JOURNAL)
Journal identifiersISSN: 1757-7780 • E-ISSN: 1757-7799
PublisherWiley (PUBLISHER • GB)
DOI10.1002/wcc.876
OpenAlexW4391173679
LanguageEN
Citations received5
References cited57

The academic literature and policy discussions on the role that central banks and financial supervisors (CBFS) should play in the ecological transition, almost nonexistent five years ago, have since grown at an impressive pace. This has resulted in a wide range of proposals that often generate debates and even misunderstandings, for lack of a coherent analytical framework. Against this backdrop, this article provides a comprehensive overview of the different theoretical backgrounds and worldviews that inform existing proposals, and discusses the challenges and debates they generate when assessed from other perspectives. We identify three main approaches, or three “tales” of central banking and financial supervision in the face of ecological threats: (i) one that argues that CBFS should focus on assessing the (so‐called “physical” and “transition”) risks that environmental issues pose to price and/or financial stability; (ii) one that places great emphasis on the ability of CBFS to help trigger systemic change, and thereby promotes proactive actions by CBFS to steer financial markets toward greening their activity beyond a risk‐based approach; (iii) one that sees CBFS transformation as necessary but part of broader institutional change that they cannot deliver on their own, thereby requiring an evolutionary perspective. Through this comprehensive literature review, this article seeks to provide a coherent framework through which future academic contributions and policy proposals can be better understood and assessed. This article is categorized under: Climate Economics > Economics and Climate Change Climate Economics > Economics of Mitigation

Biology · Business · Financial system · Transition (genetics · Chemistry · Climate Change Policy and Economics · Innovation, Sustainability, Human-Machine Systems · Sustainable Finance and Green Bonds · Ecology

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