Response to your May 5th letter on the Bundesbank’s position regarding climate integration in monetary and prudential policy

The document challenges the Bundesbank's reliance on 'market neutrality' and climate risk disclosure, asserting that the ECB's current asset purchase strategies create a 'carbon bias' that undermines EU climate goals and threatens price stability. The authors advocate for a 'precautionary approach' to climate risk, calling for the immediate decarbonization of ECB operations, specifically targeting fossil fuel assets.

• The authors argue that the principle of 'market neutrality' is a myth and not a legal requirement for the ECB, noting that central bank interventions are inherently non-neutral. They cite examples such as the ECB's sovereign bond purchases based on capital keys rather than market capitalization and the decision during the Covid-19 pandemic to retain bonds that fell below investment grade.
• The document claims the ECB possesses a 'carbon bias' because its credit quality requirements for eligible assets do not account for environmental impact or climate risk. This bias leads the ECB to amplify market failures by purchasing large volumes of bonds from high-carbon companies, which the authors argue contradicts the ECB's secondary objective to support general EU economic policies.
• The authors reject the proposal that mandatory climate risk disclosure by counterparties is sufficient for risk management. They argue that disclosure does not guarantee risk reduction and that financial markets currently fail to reflect climate risk due to 'radical uncertainty'.
• The document calls for the Bundesbank to advocate for the immediate decarbonization of ECB operations using available information rather than waiting for ideal metrics. It specifically recommends targeting fossil fuel assets and companies first, as they concentrate climate-related risks.

APA

Reclaim Finance (2021). Response to your May 5th letter on the Bundesbank’s position regarding climate integration in monetary and prudential policy. https://reclaimfinance.org/site/wp-content/uploads/2021/06/NGO-letter-to-Jens-Weidmann-Response-June-15th-2021.pdf

Chicago

Reclaim Finance. Response to your May 5th letter on the Bundesbank’s position regarding climate integration in monetary and prudential policy. 2021. https://reclaimfinance.org/site/wp-content/uploads/2021/06/NGO-letter-to-Jens-Weidmann-Response-June-15th-2021.pdf.

Wikipedia

{{cite press release |author=Reclaim Finance |title=Response to your May 5th letter on the Bundesbank’s position regarding climate integration in monetary and prudential policy |date=15 June 2021 |url=https://reclaimfinance.org/site/wp-content/uploads/2021/06/NGO-letter-to-Jens-Weidmann-Response-June-15th-2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{reclaimfinance2021response, author = {{Reclaim Finance}}, title = {{Response to your May 5th letter on the Bundesbank’s position regarding climate integration in monetary and prudential policy}}, publisher = {Reclaim Finance}, year = {2021}, month = jun, url = {https://reclaimfinance.org/site/wp-content/uploads/2021/06/NGO-letter-to-Jens-Weidmann-Response-June-15th-2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }