FRANKFURT (Reuters) - Promoting clean energy is not a task for monetary policy so the European Central Bank should not be asked to give preference to green bonds in its 2.3 trillion asset purchase program, Bundesbank President Jens Weidmann said on Thursday.
The market for green bonds is relatively small so any sizable investment would inevitably break with the principle of neutrality, increasing national differences in the transmission of monetary policy, Weidmann, who sits on the ECB’s rate setting Governing Council said.
“The Eurosystem’s mandate is to maintain price stability. And in order to safeguard its ability to maintain price stability, monetary policy should not be overburdened by other policy objectives,” Weidmann said.
The ECB has bought nearly a 100 billion euros worth of corporate bonds as part of quantitative easing and critics have called on the bank to either invest more in green energy or at least shun spending in certain sectors like coal or oil.
Reporting by Balazs Koranyi; Editing by Francesco Canepa