The role of central banks in promoting Green finance

Abstract

In an era of escalating environmental challenges, this research explores the complex role of central banks in the promotion of green finance. Employing a mixed-methods approach and focusing on case studies involving the European Central Bank, the People’s Bank of China, and the Federal Reserve, the study offers a nuanced understanding of the divergent strategies and challenges facing central banks. Despite political and technological hurdles, central banks have significant opportunities for financial innovation and global collaboration. Key policy implications include the need for holistic policy integration, enhanced transparency and disclosure protocols, and international cooperation. Recommendations for future research span longitudinal impact assessment, comparative financial instrument analysis, and exploring socio-economic variables. The study accentuates the transformative capacity of central banks in fostering a sustainable future, concluding that they have not only the capability but also the ethical obligation to lead this transition.