On Wednesday 13 March and Thursday 14 March, the NGO Positive Money Europe (PMEU) reacted to the new operational framework announced by the European Central Bank (ECB) (see EUROPE 13370/33). PMEU welcomes the positive elements, including the reaffirming of the ECB’s secondary mandate and the green transition in the operational framework.
However, PMEU believes that there are still shortcomings, in particular that the timeline for implementing the new instruments - longer-term refinancing operations and structural portfolios of securities - envisaged after the current balance sheet is run down, meaning not before 2026, is too late.
In addition, PMEU deplores the lower volume of liquidity that the ECB will be able to provide through these new instruments and believes that the firepower for these green objectives will be reduced, with a balance sheet that is “as lean as possible”.
Among other things, PMEU is proposing that structural longer-term refinancing operations be conducted via “green-targeted” longer-term refinancing operations (gTLTROs), which would enable the ECB to provide financing on advantageous terms to banks that lend to “green” sectors.
PMEU also wants the ECB to hold a significant proportion of green bonds and supranational bonds in this new structural portfolio.
In addition, PMEU proposes that the ECB introduce tiered remuneration for bank reserves and increase the ratio of non-remunerated minimum reserves.
Link: https://aeur.eu/f/bcd (Original version in French by Émilie Vanderhulst)