Without preempting the discussion, there are two opposing views regarding the debate on greening asset purchases. One view is that central banks would overstep their mandate if they were to discriminate among investors on the basis of considerations that fall into the realm of fiscal policy. According to this view, market neutrality is the benchmark central banks should use when purchasing bonds issued by corporates. The other view is that central banks have to respond to market failures and incorporate the far-reaching risks that climate change poses to price stability when designing their policy instruments. Importantly, this argument is not about weighing secondary objectives, which may provide additional justifications for monetary policy taking into account climate change. It is about protecting the primary objective. Of course, central banks would need to be mindful of their effects on market functioning. Overweighing green assets in monetary policy portfolios could crowd out other investors, thereby doing more harm than good. And while demand can create its own supply, success would ultimately hinge on green issuance growing substantially as the economy transitions towards its new equilibrium. Conclusion Let me conclude. The current crisis teaches us that decisive and early action is crucial to tackle global disruptions. It enables us to better imagine the much more dramatic consequences that society could face if we were to fail on our efforts to fight climate change. And while the pandemic can eventually and hopefully be cured, global warming is much harder to reverse, raising the costs of taking no action today.

Philipp M Hildebrand: Economic outlook and monetary policy Speech by Mr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, Apéritif Marché monétaire, Geneva, 17 November 2005. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss economy has benefited from a favourable international environment. Activity has remained strong in the US, whereas it has improved in Japan and, more recently, in Europe. In Switzerland also, the latest indicators point towards stronger growth. Exports remain the engine of the recovery but private consumption has also picked up. However, consumer confidence remains fragile in the context of only modestly improving labour market conditions. The SNB expects the economic recovery to continue. A sudden adjustment of the US current account imbalance or a further increase of energy prices are predominant risks. From a monetary point of view, the current situation is characterised by different counteracting forces. On the one hand, the economic outlook is positive. On the other hand, some risks put this favourable picture into perspective. Furthermore, the increase of energy prices might endanger medium term price stability at a time when monetary conditions remain expansive. Last but not least, globalisation continues to hold down the prices of many goods. In this complex environment, it is important that central banks succeed in preserving their most important monetary asset, namely well anchored inflation expectations.