The ECB states that eurozone banks should be legally bound by climate change programs.

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File photo: European Central Bank (ECB) headquarters in Frankfurt, Germany, March 12, 2016. Reuters/Kaifenbach

October 20, 2021

FRANKFURT (Reuters) – Eurozone banks should be legally required to adopt plans that outline how to reduce their exposure to climate-related risks over the next 30 years. Frank Alderson, a member of the European Central Bank’s board of directors, said on Wednesday.

The ECB is pressing 114 banks to address the risks posed by climate change, such as weather hazards and new regulations aimed at limiting emissions, through increased testing and disclosure requirements.

Alderson, a Dutch lawyer representing the ECB’s oversight department on the board, said banks should be obliged to address climate-related risks.

“Only by implementing a mandatory transition plan can we turn the lofty intentions of banks into concrete actions over the next 30 years,” Alderson said at an event organized by Austrian financial regulators. told.

The authority of the ECB as an observer is restricted by European and national law. It has landed it in boiling water in the past, for example when it tried to force banks to take off bad loans faster and faced backlash from lawmakers for breaching its privileges.

(Reporting by Francesco Canepa; Editing by Balazs Corani and Alex Richardson)

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