Lagarde, European Central Bank: Climate change has

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The European Central Bank must take climate changes into account when making decisions because they have a clear impact, especially on inflation, said the president of the ECB, Christine Lagarde, in an interview given to the publication Madame Figaro on Thursday, reports Reuters.

“In the conditions in which more and more climatic disasters, droughts and famines are occurring in the world, there will be repercussions on prices, on insurance premiums and on the financial sector. We have to take them into account”, declared Lagarde.

The head of the ECB added that he can imagine that there will be a rapid harmonization and tightening of different environmental and governance standards.

A year ago, the ECB presented its expectations on climate risks, but so far banks have been slow to adapt and the Frankfurt-based institution has repeatedly called on them to speed up the pace.

The ECB is putting pressure on companies and banks to understand and manage climate threats and the possibility that polluting firms will be forced out of business.

The European Central Bank has established a center of expertise dedicated to climate change, which will advise the ECB on how to incorporate environmental aspects into monetary policy and banking supervision. Around 12 people will work in the new centre, which will work with existing teams within the ECB.

“We decided to establish a new climate change center to bring together more effectively the different types of climate expertise that exist within the bank. Climate change affects all areas of our policy”, stated the president of the ECB, Christine Lagarde.