Monetary and financial markets
Central banks and financial supervisors, and their monetary, prudential and ‘developmental’ policy frameworks, will be directly affected by environmental degradation, climate change and the transition to a sustainable and resilient economy. CETEx’s work in this area focuses on integrating the related economic, financial and price stability implications into assessment and policy frameworks. We also examine the role of suitable policies to support transition efforts and the supporting role of monetary and financial market policy for other government priorities.
We focus on four research and policy areas:
- Monetary policy – investigating the implications of environmental degradation, climate change and a low-carbon transition for the economy and price stability, as well as how to prioritise balance between different central banking objectives such as price stability, employment and support for government objectives
- Prudential regulation and supervision – developing justification for, and calibration of, the necessary adjustments of prudential supervision frameworks to assess, integrate and mitigate related financial risk.
- Support for government policy priorities – analysing how the role of central banks may change once environmental degradation and climate change are recognised as emergencies with systemic implications.
- Financial market regulation and standardisation – identifying implications for financial risk, markets and pricing mechanisms, and hence for financial market regulation and standardisation.