Christine Lagarde, President of the European Central Bank (ECB), defends her approach of also considering the climate footprint of the issuers of these promissory notes when buying bonds. The currency guardian has now sent a corresponding answer to a critical MEP. The Frankfurt central bank wants to buy more bonds from corporations that emit fewer greenhouse gases into the atmosphere. This makes it easier for companies to get into debt. Companies with a lousy climate balance should lose out. Lagarde presented this request in the summer.
The CSU MEP Markus Ferber does not think much of this approach. The economic policy spokesman for the Christian Democratic EPP Group sees the risk that a bubble could form in eco-securities. He also fears disadvantages for the actual mission of the ECB: the fight against high inflation. Ferber therefore sent a letter to Lagarde with three critical questions. Among other things, he wanted to know how the new concept could be reconciled with the principle of market neutrality. This means that when making purchases, the ECB should not distort the prices of securities or favor certain issuers.
Lagarde now replied with a three-page letter, which the Süddeutsche Zeitung present. There she defends the green approach and explains that market neutrality is not a legal requirement for the ECB, but merely a kind of tool for the central bank to act on the financial markets. The Frenchwoman writes that the ECB had already deviated from a “completely market-neutral distribution” earlier.
That doesn’t convince Ferber: The central bank is “finally saying goodbye to the concept of market neutrality,” he says. “At a time when the ECB is miles away from its inflation target, Christine Lagarde would be well advised to focus on the issue of price stability.”