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Targeting a sustainable recovery with Green TLTROs

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  • van 't Klooster, Jens
  • van Tilburg, Rens

Abstract

Since their introduction in 2014, the European Central Bank’s Targeted Longer-Term Refinancing Operations (TLTROs) have become ever larger and ever more attractive for banks. As they increasingly drive bank lending, TLTROs often enable unsustainable investments. This report proposes Green TLTROs, which are refinancing operations that provide banks with cheap funding if they lend in accordance with the EU’s taxonomy of green activities. We discuss the legality of such a market-based programme and show that it is compatible with a level playing field between banks and the singleness of monetary policy. We outline several possible technical designs of the Green TLTROs and suggest a pilot programme for energy efficient housing that can quickly be implemented.

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  • van 't Klooster, Jens & van Tilburg, Rens, 2020. "Targeting a sustainable recovery with Green TLTROs," SocArXiv 2bx8h, Center for Open Science.
    • Handle: RePEc:osf:socarx:2bx8h
    DOI: 10.31219/osf.io/2bx8h
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    References listed on IDEAS

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    Cited by:

    1. William Oman & Romain Svartzman, 2021. "What Justifies Sustainable Finance Measures? Financial-Economic Interactions and Possible Implications for Policymakers," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(03), pages 03-11, May.
    2. Nguyet Anh Dang & Rubianca Benavidez & Stephanie Anne Tomscha & Ho Nguyen & Dung Duc Tran & Diep Thi Hong Nguyen & Ho Huu Loc & Bethanna Marie Jackson, 2021. "Ecosystem Service Modelling to Support Nature-Based Flood Water Management in the Vietnamese Mekong River Delta," Sustainability, MDPI, vol. 13(24), pages 1-28, December.

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