Central banks and climate change: Main issues and perspectives

In the last decades, during the unfolding of momentous events, we saw the growing awareness of the need for a transition to a sustainable economy. The radical economic and social change will require the mobilization of colossal resources, and hence the alignment of the financial system to this goal. Climate change also affects the functions of central banks. First of all, it can affect macroeconomic conditions, forcing a different approach to monetary policy and financial stability. Secondly, it affects the risks of banks and other financial intermediaries, thus financial supervision. Finally, the transition also affects the payment system. In this work, we will try to sum up the main topics concerning the links between central banks, the transition, and the possible objections to them. We conclude that an efficient transition requires that the financial markets business model become sustainable, a goal that becomes more difficult in the new geo-political situation.