Unlocking the ECB’s green potential
The ECB has committed to designing its new structural monetary policy operations in support of the green transition. But there's a catch: under its current framework, these operations won't arrive before 2028 – and will reach only around €200 billion by 2029. Too little, too late to close Europe's green investment gap or meaningfully reduce its fossil fuel dependence.
In this e-paper, Jordi Schröder Bosch argues that an alternative operational framework (one in which structural operations play a central role in liquidity provision) would allow the ECB to act earlier and at far greater scale. The study also proposes three concrete designs for a green structural long-term refinancing programme, weighing their feasibility against the data constraints introduced by the EU's Omnibus legislative package.
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Product details
Table of contents
Executive summary
Abbreviations list
1. Introduction
2. The importance of a green structural refinancing operation
3.The evolution of the ECB’s operational framework
4 The 2024 revision of the operational framework
5 The role of structural operations
6 An alternative operational framework proposal
7 Designing a green structural long-term refinancing operations programme
7.1. A performance-based green structural refinancing programme
7.2. A transition plan-based programme
7.3. Embedding the green structural refinancing operation into the broader operational framework
8.Policy recommendations