BIS Launches Euro Green Bond Fund for Central Banks
BIS launched a EUR-denominated, open-ended fund for green bond investments by central banks and official institutions, following the launch of the first BIS green bond fund denominated in USD in September 2019. ECB has decided to use part of its own funds portfolio to invest in this second BIS euro-denominated green bond investment fund for central banks (EUR BISIP G2). With this investment, ECB is contributing, within its mandate, to global efforts to promote environmental objectives and combat climate change.
Together, the two BIS green bond funds will manage some USD 2 billion in green bonds for central banks with the expectation that the funds will continue to grow considerably. The two funds are structured according to the Swiss law and belong to the BIS Investment Pool (BISIP) family, a format commonly used by BIS Asset Management for its fixed-income investment products. They are managed in-house by the BIS Asset Management. Eligible bonds have a minimum rating of A– and comply with the International Capital Market Association's Green Bond Principles and/or the Climate Bond Standard published by the Climate Bonds Initiative. BIS also produces an annual impact report for investors based on the information provided by the issuers of the bonds in which the funds invest.
The two BIS funds have been developed with the support of an advisory committee drawn from a global group of central banks. They are part of the BIS green bond fund initiative, which helps central banks to incorporate environmental sustainability objectives in the management of their reserves and capital, in line with a growing demand for climate-friendly investments among official institutions. The funds promote green finance through sizable investments in environmentally friendly projects such as renewable energy production and energy efficiency and support the adoption of best market practices and reporting standards to deepen the green bond market. The ECB investment in the EUR BISIP G2 is part of the sustainable and responsible investment strategy of ECB, which targets an increase in the share of green securities in its own funds portfolio. Such investment complements direct purchases of green bonds in secondary markets. ECB already holds green bonds amounting to 3.5% of its own funds portfolio, with a total market value of EUR 20.8 billion. ECB plans to increase this share over the coming years.
Related Links
Keywords: International, EU, Banking, Green Bond Fund, Sustainable Finance, ESG, ECB, BIS
Previous Article
EIOPA Sets Out Principles for Liquidity Stress Test for InsurersRelated Articles
BoE Seeks Information Before Migrating Statistical Reporting to BEEDS
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
FCA Publishes Final Rules on Investment Firms Prudential Regime
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).
CFRF Publishes Guides to Manage Financial Risks from Climate Change
The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.
PRA Finalizes Policy for Non-Performing Exposure Securitizations
The Prudential Regulation Authority (PRA) published the final Policy Statement PS24/21 that contains the new Non-Performing Exposures Securitization Part of the PRA Rulebook and an updated Supervisory Statement SS10/18 on the general requirements and capital framework with respect to securitizations.
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
EU to Explore Potential of Establishing a Joint Cyber Unit
The European Council adopted conclusions inviting the European Union (EU) and the member states to further develop the cybersecurity crisis management framework.
EC Sets Out Work Program for 2022
The European Commission (EC) adopted the work program for 2022.
