Central bankers’ actions could fill in the gaps on ‘net zero’ in the financial sector

Financial institutions have a more complex path towards ‘net zero’ targetingA working paper from researchers at Banque de France shows how changes to align central bank collateral requirements with a ‘2 degree alignment’ could work Changes to central banking rules on seemingly obscure topics such as collateral eligibility can have cascading impacts throughout sector

Central banks are a key part of the ‘net zero’ plan because the time frames over which action is needed works well with the measured pace of change that fit within their mandates. A working paper released by researchers at Banque de France explores how central banks could fit Paris alignment within their collateral eligibility requirements.

This is a difficult avenue for c...