ECB to apply climate risk to collateral framework
Move expected to reduce value of assets in bank’s refinancing operations
The European Central Bank is to apply climate risk to the valuation of assets in the collateral framework it uses for its refinancing operations.
The ECB announced today (July 29) that the “climate factor” would apply from the second half of 2026 to corporate bonds issued by non-financial firms. The aim, it said, was to capture devaluations linked to adverse events associated with the green transition.
The Eurosystem’s refinancing operations were a “key instrument” in maintaining price stability
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