Institute of Economic Research
The Role of Central Banks in Responding to the Risks Posed by the Climate Change
Name of the supervisor
prof. Ing. Juraj Sipko, PhD., MBA.
Faculty of National Economy
The role of central banks in responding to the risks arising from climate change, as the impact on central banking can be observed not only in the areas of monetary policy and the investment portfolio but also in the area of financial stability and regulation of banks. Risks can be divided into physical and adaptation risks, with transmission channels being present in the areas of credit risk, market risk, insurance risk, operational risk, and liquidity risk. Possible steps and tools of central banks include monetary policy operations in line with climate goals, adjustment of central banks' non-monetary policy portfolios, incorporation of climate change into macroeconomic models of central banks and credit risk assessment models by commercial banks, communication with the market to highlight the importance. The questions at hand may include issues of market neutrality, determining the degree of support for EU policies through monetary policy (the problem of the political majority) and, of course, the lack of data and standards for the precise and correct setting of steps and tools. Because there are many unanswered questions, the approaches and attitudes of individual central banks in the European Union, the United States and other regions differ. It is important to compare the possible influence of central bank policies with the options available to state or supranational policies - tax breaks, regulatory tools.