Pablo Hernández de Cos: Economic and financial policy geared to climate goals

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at a seminar, organized by the Club Español de la Energía, Madrid, 25 February 2020.

Central bank speech  | 
28 February 2020

Ladies and gentlemen, good morning.

I should like to thank the organisers and, in particular, the President of the Club Español de la Energía, Miguel Antoñanzas, for the invitation to participate in this seminar on such an important subject as sustainable financing for climate goals. Climate change and the transition to a more sustainable economy are undoubtedly becoming one of society's main concerns. One of the reasons for this is that the impact of this transition will affect virtually every social and economic agent. The financial sector is no exception to this. Nor obviously is the energy sector.

In my address today I wish to focus on three specific questions related to this issue. First, I will propose some basic principles which, in my opinion, should inform the economic policy deployed to guide the process of structural change entailed by the transition to a more sustainable economy. Second, I will describe the challenges that climate change and this transition pose for supervision and financial regulation. Finally, I will discuss what central banks can do to encourage the transition to a more sustainable economy. In particular, I should like to dedicate a few words to the role that monetary policy can play in achieving this objective.

General principles that should inform economic policy in the face of climate change