ECB’s Knot: The central could skew bond buys to green assets but needs benchmark

The European Central Bank could favor greener assets in its bond purchases but should not be responsible for developing the new benchmarks for climate-friendly quantitative easing, Governing Council member and the Dutch central bank chief Klaas Knot told an online conference organized by the Financial Times (FT).

Key quotes

"That's something we should absolutely consider."

"My preference would be for us not to come up with an allocation ourselves, but that there would be a somewhat better benchmark developed outside the central banking world that we could then use to tilt these purchases."

"This is all about imperfect pricing, a sort of market failure and we could only get better pricing of climate-related risk once there is more data, more information, out there. And that's why we stimulate the harmonization of disclosure standards.”

Market reaction

EUR/USD was last seen trading at 1.1739, down 0.19% on the day, mainly undermined by the surging US Treasury yields.