Last year the Governing Council adopted a comprehensive action plan[9] to further incorporate climate change considerations into its monetary policy framework. There are a number of actions to which the ECB is committed under this plan. Let me now give a very concrete example of how the ECB has taken into account climate change considerations in the context of its corporate sector purchase programme (CSPP). Under the CSPP, the Eurosystem purchases corporate bonds for monetary policy purposes. Right now we are in the reinvestment phase which means that we are no longer increasing our portfolio but only reinvesting bonds that mature. Up until October 2022, the Eurosystem purchased these bonds in accordance with the “market benchmark”. However, owing to the way the corporate bond market functions, this “market benchmark” has been criticised as leading to the purchase of a larger proportion of bonds from carbon-intensive firms. Therefore, from October 2022, the ECB started to implement its decision to “tilt” CSPP reinvestments to increase the share of assets from issuers with better climate performance, rather than those with poorer climate performance. There are two main reasons for this decision. First, the ECB considered this essential in order to effectively pursue its primary objective of maintaining price stability. Given that carbon-intensive issuers are more vulnerable to physical and transition risks arising from climate change, large holdings of bonds from such companies pose higher financial risks to the Eurosystem’s balance sheet, which has an impact on the implementation of its monetary policy.

Also, the lessons of Friedman and Schwartz (1963) on monetary policy and the role of central banks as lenders of last resort, of Keynes (1935) on the role of expansionary policies, and of Bernanke (1983) on the role of the financial channel for the transmission of policy actions, have been essential in policy decisions adopted since the onset of the current crisis. Many subsequent studies have shed additional light on the characteristics of good policies and have provided the base for the aggressive monetary and fiscal policies that have been applied around the world, and should also illustrate the way in which the stimulus must be withdrawn. Finally, the use of the gold standard accounted largely for the depth of the Great Depression (Bernanke and James, 1991; Eichengreen, 1992). Moreover, in the midst of the crisis in 1931, the U.S. raised the interest rate to defend the dollar parity, aggravating the crisis and causing deflationary pressures. In Latin America, thanks to lessons learned from mistakes of the past, it has been understood that macroeconomic stability, in both monetary and fiscal terms, foreign exchange flexibility, and a well regulated financial system are crucial to mitigate the effects of external scenarios as adverse as this one. This reflects major progress in economic policy, which has benefited from important practical lessons and advances in research following the debt crisis. Final remarks There will be plenty of time to continue analyzing where was the profession such that it did not warn of the magnitude of the crisis.