Christine Lagarde Has a Troubling Ambition
The ECB already does what it can in the climate fight. Skewing its bond purchases against “non-virtuous” companies would set a terrible precedent.
How to save the world.
Photographer: SAUL LOEB/AFPChristine Lagarde is eager to make her mark at the European Central Bank. At the moment, we know precious little about her views on the future course of monetary policy. But one thing is clear, the new president wants the ECB to take on a bigger role in the fight against climate change.
Lagarde thinks it’s possible to reconcile this ambition with the ECB’s mandate, which includes, at least indirectly, improving the quality of the environment. But she should be extremely mindful of another important principle: Market neutrality. That means the ECB should not offer an advantage to any particular company or sector.