Rolling coverage of the latest economic and financial news
- Lagarde chairs first ECB governing council today
- Expected to outline new vision for eurozone central bank
Christine Lagarde could help the ‘green finance’ movement today, by signalling that the ECB will do more to fight the climate emergency.
Environmental activists are demanding action — on Lagarde’s first day, they marched outside the ECB’s headquarters with a banner that read “if the Earth was a bank you’d have rescued it”.
Into the breach, the political, social and economic zeitgeist appears to have presented green bonds an opportunity to play a meaningful role in policy.
Whether it’s the US Democrats’ left wing pushing a Green New Deal, or President Lagarde orienting the ECB towards a role in combatting global warming, green bonds represent an attractive fiscal option, particularly in the eurozone.
Christine Lagarde will also release the ECB’s latest economic forecasts today.
They are likely to predict slow growth and weak inflation, meaning no pressure to change policy today.
Staff forecasts for GDP growth, headline inflation and core inflation are likely to be stable for the first time since the exit from the APP was announced in mid-2018. The Council will likely remain cautious and view the balance of risks as still tilted to the downside. The accommodative policy stance will remain appropriate.
However, Lagarde is likely to oversee one immediate change. That is, they expect the willingness to use “all instruments” to be conditioned on an assessment of the possible side effects of policy.