Practice In Sustain... - Central Banking: Theory And

The risk that sudden policy shifts or technological breakthroughs will lead to "stranded assets"—investments in fossil fuels that lose value overnight. 2. Practice: Greening the Monetary Policy Toolkit

However, the emergence of has challenged this stance. Economists now argue that ignoring carbon intensity is not being neutral; it is a failure to account for risk. Theory has expanded to include two primary categories of risk: Central Banking: Theory and Practice in Sustain...

The frontier of sustainable central banking is moving toward . While carbon has been the focus, there is growing realization that the loss of biodiversity and ecosystem services (like pollination or clean water) poses a similar systemic risk to the global food supply and pharmaceutical industries. The risk that sudden policy shifts or technological

Historically, central banking theory was built on the principle of . The idea was that central banks should not pick "winners and losers" when conducting open-market operations or setting collateral frameworks. Economists now argue that ignoring carbon intensity is