[17] Before considering specific avenues to address the implications of climate change, we therefore need to thoroughly explore whether the Treaties provide a sound legal basis for the ECB to support society’s collective effort to combat climate change. The legal basis for ECB policy action Both our primary and our secondary mandate provide potential legal foundations for the ECB to consider its role in addressing the challenges arising from climate change. [18] In fact, as I have argued previously, our primary mandate requires us to take climate change into account if its consequences pose a threat to price stability in the euro area. [19] Emerging evidence suggests that climate change may indeed hamper the transmission of monetary policy to the real economy, affect potential growth as well as the equilibrium real interest rate, and increase macroeconomic volatility. [20] If climate change does pose a danger to price stability, the provisions of the Union’s legal framework dictate that the ECB would need to take – possibly pre-emptive – action to safeguard the continued fulfilment of our primary mandate. [21] Our secondary mandate could provide an additional justification for taking climate change into consideration in our monetary policy decisions: it obliges the ECB to ensure that our measures support the  general economic policies in the EU, with the important restriction that our actions must not prejudice our price stability objective. [22] Our supporting role means, however, that we neither have the primary responsibility for these policies nor the power for autonomous policy-making to address climate change.

This funding can be provided by the PMCCF either through purchases of eligible corporate bonds as the sole investor at issuance, or from purchases of portions of syndications at issuance. The secondary market corporate credit facility (SMCCF), also backed by the U.S. Treasury with funding from the Federal Reserve, will play an important complementary role to the PMCCF. Here again, there will be two mechanisms at work: the SMCCF may either purchase eligible corporate bonds with a remaining maturity of 5 years or less, or it can purchase U.S.-listed ETFs. For ETFs, the preponderance of holdings will be of ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds, and the remainder will be in ETFs whose primary investment objective is exposure to U.S. high-yield corporate bonds. Taken together, the corporate credit facilities will have three main objectives when we go live in the coming weeks: first, to provide broad support for market functioning in secondary markets to allow for orderly and timely risk transfer in corporate credit; second, to support primary issuance for businesses at funding costs that better reflect normal liquidity conditions; and third, to reduce the incidence and severity of fire sales and/or indiscriminate liquidation. Municipal Liquidity Facility The last facility I’ll mention today is the municipal liquidity facility, which was designed to help 2/4  BIS central bankers' speeches  provide states, cities and counties with the funding needed to provide essential public services to their citizens.