Colombia Central Bank issued “Climate change: policies to manage its macroeconomic and financial effects”

August 21, 2020 — It is increasingly recognized that climate change generates major macroeconomic and financial risks. After a brief analysis of the macroeconomic, fiscal and tax policies to manage these risks, this paper concentrates on: (i) how financial policies can help improve transparency and climate-related risk disclosure in financial institutions’ balance sheets and assets prices, particularly with appropriate prudential regulation and supervision; and (ii) how those risks could be taken into account in monetary policy and central banks’ balance sheets and operations. The paper ends with some reflections on the COVID-19 pandemic and the will for a “green” recovery. Read more.