Latest news with #FrankElderson
Bloomberg
11-07-2025
- Business
- Bloomberg
ECB to Be ‘Pragmatic' in Policing Banks' Carbon Transition Plans
The European Central Bank signaled that it won't immediately hold lenders to strict demands as they prepare legally-mandated plans for how they will accompany the move to a low carbon-economy. The ECB will take a gradual, 'pragmatic and targeted approach' to such transition planning when a relevant requirement takes effect next year, Executive Board Member Frank Elderson wrote in a blog post on Friday.
Business Times
07-07-2025
- Business
- Business Times
ECB warns of impact of heat waves on inflation, GDP growth
[SINTRA, PORTUGAL] The link between heat and key economic indicators such as inflation and gross domestic product is too important to ignore, according to European Central Bank (ECB) executive board member Frank Elderson. 'We have progressed in understanding that accounting for the climate and nature crises is relevant,' he said in an interview. 'If you think about the exceptionally hot summer of 2022, food-price inflation was up between 0.4 and 0.9 percentage points' and 'there was quite a measurable hit on German GDP. So these things are relevant'. The comments coincide with another European heat wave in which much of the region has experienced unusually high temperatures fuelled, by climate change. Scientists have found that a hotter planet has the potential to threaten price stability, in part as crops become more difficult to tend and food prices rise. Against that backdrop, the ECB is now intensifying its efforts to deal with climate-related economic risks. That includes adjustments unveiled last week showing that it will fully take into account not just the implications of climate change, but also 'nature degradation' when setting monetary policy. The decision represents an 'important addition' to the wording used by the central bank, Elderson said on the sidelines of the ECB's annual conference in Sintra, a town just a short drive north of the capital Lisbon. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up The new focus on nature-related risks will eventually feed into various aspects of the ECB's efforts to ensure price stability and to supervise Europe's systemically important banks. The approach is in stark contrast to that of the US Federal Reserve. While Fed chair Jerome Powell has in the past acknowledged the threats that climate change poses to the US economy and financial system, he's also repeatedly stressed that the Fed does not have a mandate to foster a low-carbon transition. 'You heard me say over and over again that we will not be climate policymakers,' Powell said during a press conference in May. 'Our role on climate is a very narrow one.' The Fed's efforts to downplay the relevance of climate change in safeguarding financial stability have also encompassed interventions to water down global standards, including those set by the Basel Committee on Banking Supervision, Bloomberg has previously reported. Even in Germany, Europe's largest economy, there's clear evidence of resistance toward policies promoting climate and human rights considerations. Stiftung Familienunternehmen, a lobby dedicated to defending the interests of family businesses, issued a statement last Friday questioning the constitutionality of incorporating such standards in European regulations. Elderson said that 'while there's a backlash out there', the ECB governing council 'sticks to its guns and actually adds to that to say we now understand on the basis of the work that has been done that we need to think beyond just what climate means for price stability'. The ECB is still studying events such as the summer of 2022 and its impact on inflation and GDP to get a sense of what's ahead, Elderson said. Nature risk, meanwhile, 'is complicated because there is not one single metric like CO2,' he said. Instead, 'you have to look at fish stocks, you have to look at timber, you have to look at the soils, you have to look at water scarcity and water quality'. In the short term, there will be 'more research, more outreach', he said. 'Then we need to ask: what does this mean for our understanding of the economy, for our understanding of inflation? What does it mean for debt sustainability?' Ultimately, the response may be similar to the ECB's efforts to tackle climate risk, he added. 'Whenever we design an instrument or whenever we think about collateral or when we think about tilting of asset purchases at some point in the future, we take this into account,' he said. 'If you were to close your eyes to that, you would also miss an important part of credit risk for at least some of the banks that we supervise.' BLOOMBERG
Yahoo
04-07-2025
- Business
- Yahoo
ECB Warns of Impact of Heat Waves on Inflation, GDP Growth
(Bloomberg) -- The link between heat and key economic indicators such as inflation and gross domestic product is too important to ignore, according to European Central Bank Executive Board member Frank Elderson. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals NYC Commutes Resume After Midtown Bus Terminal Crash Chaos Struggling Downtowns Are Looking to Lure New Crowds Massachusetts to Follow NYC in Making Landlords Pay Broker Fees What Gothenburg Got Out of Congestion Pricing 'We have progressed in understanding that accounting for the climate and nature crises is relevant,' Elderson said in an interview. 'If you think about the exceptionally hot summer of 2022, food-price inflation was up between 0.4 and 0.9 percentage points' and 'there was quite a measurable hit on German GDP.' 'So these things are relevant,' he said. The comments coincide with another European heat wave in which much of the region has experienced unusually high temperatures fueled by climate change. Scientists have found that a hotter planet has the potential to threaten price stability, in part as crops become more difficult to tend and food prices rise. Against that backdrop, the ECB is now intensifying its efforts to deal with climate-related economic risks. That includes adjustments unveiled this week showing that it will fully take into account not just the implications of climate change, but also 'nature degradation' when setting monetary policy. The decision represents an 'important addition' to the wording used by the central bank, Elderson said on the sidelines of the ECB's annual conference in Sintra, Portugal. The new focus on nature-related risks will eventually feed into various aspects of the ECB's efforts to ensure price stability and to supervise Europe's systemically important banks. The approach is in stark contrast to that of the Federal Reserve. While Chair Jerome Powell has in the past acknowledged the threats that climate change poses to the US economy and financial system, he's also repeatedly stressed that the Fed doesn't have a mandate to foster a low-carbon transition. 'You heard me say over and over again that we will not be climate policymakers,' Powell said during a press conference in May. 'Our role on climate is a very, very narrow one.' The Fed's efforts to downplay the relevance of climate change in safeguarding financial stability have also encompassed interventions to water down global standards, including those set by the Basel Committee on Banking Supervision, Bloomberg has previously reported. Even in Germany, Europe's largest economy, there's clear evidence of resistance toward policies promoting climate and human rights considerations. Stiftung Familienunternehmen, a lobby dedicated to defending the interests of family businesses, issued a statement on Friday questioning the constitutionality of incorporating such standards in European regulations. Elderson said that 'whilst there's a backlash out there,' the ECB Governing Council 'sticks to its guns and actually adds to that to say we now understand on the basis of the work that has been done that we need to think beyond just what climate means for price stability.' The ECB is still studying events such as the summer of 2022 and its impact on inflation and GDP to get a sense of what's ahead, Elderson said. Nature risk, meanwhile, 'is complicated because there is not one single metric like CO2,' Elderson said. Instead, 'you have to look at fish stocks, you have to look at timber, you have to look at the soils, you have to look at water scarcity and water quality.' In the short term, there will be 'more research, more outreach,' he said. 'Then we need to ask: what does this mean for our understanding of the economy, for our understanding of inflation? What does it mean for debt sustainability?' Ultimately, the response may be similar to the ECB's efforts to tackle climate risk, he added. 'Whenever we design an instrument or whenever we think about collateral or when we think about tilting of asset purchases at some point in the future, we take this into account,' he said. 'If you were to close your eyes to that, you would also miss an important part of credit risk for at least some of the banks that we supervise.' --With assistance from Nicholas Comfort, Joe Wertz and Rachel Morison. (Adds statement from German business lobby in 11th paragraph.) SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too America's Top Consumer-Sentiment Economist Is Worried How to Steal a House China's Homegrown Jewelry Superstar Sperm Freezing Is a New Hot Market for Startups ©2025 Bloomberg L.P.
Bloomberg
04-07-2025
- Business
- Bloomberg
ECB Warns of Impact of Heat Waves on Inflation, Economic Growth
By Alexander Weber and Save The link between heat and key economic indicators such as inflation and gross domestic product is too important to ignore, according to European Central Bank Executive Board member Frank Elderson. 'We have progressed in understanding that accounting for the climate and nature crises is relevant,' Elderson said in an interview. 'If you think about the exceptionally hot summer of 2022, food-price inflation was up between 0.4 and 0.9 percentage points' and 'there was quite a measurable hit on German GDP.'
Bloomberg
09-06-2025
- Business
- Bloomberg
Europe Must Defend Rule of Law Standards, ECB's Elderson Says
Europe can foster economic well-being and help increase the euro's global role by adhering to and even strengthening rule of law standards, European Central Bank Executive Board member Frank Elderson said. The European Union is 'a beacon of legal certainty, strong institutions and the protection of fundamental rights,' he said Monday in a speech at the Italian Constitutional Court in Rome, emphasizing that the connection between this principle and a thriving economy is 'well established.'
