Serious about green? Lagarde must ditch dirty debt

Christine Lagarde, the new European Central Bank president, has planted a flag, placing climate change at the centre of the ECB’s priorities. That is bold — and laudable — but if the ECB is to have a meaningful impact, green QE is not enough. The ECB must divest its holdings of unsustainable assets.

  • By Lewis McLellan
  • 12 Dec 2019
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The idea of adding a green dimension to the ECB’s Asset Purchase Programme has sparked lively debate, but this would bring only marginal benefits at best. At worst, if directed at green bonds, it could distort a still small and illiquid market.

If the ECB wants to make a real difference, it should follow Sweden's Riksbank and divest assets from unsustainable or polluting businesses.

It is not a simple task. The ECB’s first responsibility is to the financial stability of the eurozone, and any large change in its investment behaviour could pose risks.

Further, the issue of what is an unsustainable business is horrendously thorny. Punishing some firms might make it harder for them to transition to more sustainable models — or at least, that is what they will complain.

But those are edge cases. That drawing the boundaries is difficult is not a sufficient reason not to try.

If financial markets are to play a part in engineering the sustainable economy of the future, their biggest players cannot ignore their best tools.

Markets are about prices. If we want to deter a type of behaviour, that behaviour must become more expensive. Divestment is the best way to bring that about, and central banks — still essentially an arm of the state, in spite of their vaunted independence — have a responsibility to lead the way.

  • By Lewis McLellan
  • 12 Dec 2019

All International Bonds

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Citi 29.61 88 8.60%
2 JPMorgan 23.76 85 6.90%
3 Barclays 20.64 81 5.99%
4 BofA Securities 19.82 71 5.76%
5 BNP Paribas 16.27 62 4.73%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 60.84 264 7.99%
2 Credit Agricole CIB 47.68 243 6.26%
3 JPMorgan 35.73 111 4.69%
4 SG Corporate & Investment Banking 34.28 171 4.50%
5 UniCredit 33.71 188 4.43%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Barclays 0.75 7 12.00%
2 Morgan Stanley 0.70 5 11.15%
3 JPMorgan 0.58 5 9.31%
4 Citi 0.48 4 7.75%
5 Goldman Sachs 0.43 3 6.92%