MNB Vice President: handling the crisis cannot come at the expense of sustainability

By: STA Date: 2022. 10. 06. 12:00

The central bank is working hard to bring inflation back under control in accordance with its primary goal, but at the same time, the management of the current crisis cannot come at the expense of sustainability goals – said Csaba Kandrács, the vice-president responsible for the supervision of financial organizations and consumer protection of the Magyar Nemzeti Bank (MN) Green finance conference on Thursday in Budapest.

(Photo: Pixabay)

He emphasized that in the midst of economic shocks, efforts must be redoubled to achieve green goals. This year will go down in the history books as a year of crises, not only because of the attack on Ukraine and the prolongation of the epidemic, but also because of the drastic rise in the cost of food and energy, as well as the cost of living and the challenges of globalization, he noted. The vice president drew attention to the fact that 2022 could be the milestone when the golden age of globalization ends and a new era opens in economic history: the age of regionalization of trade. Csaba Kandrács warned that on the international stage, the fight against climate change and the protection of biodiversity have been pushed into the background, and companies are looking for ways to evade the fulfillment of the agreed goals. Meanwhile, nature sends “red signals”, this summer was the driest in the last 500 years, the lack of precipitation caused problems not only in Europe, but also in China, at the same time, for example, the flood caused amazing damage in Pakistan, he listed. He also recalled that just 500 years ago Magellan’s expedition created the foundations of international trade. Hungary is committed to making the economy sustainable, the MNB – one of the first central banks in the world – won a green mandate from the parliament – he reminded.

The central financial institution has launched a number of programs for environmental sustainability

For example, he carried out a stress test to determine which sectors are expected to be most affected by climate change, he mentioned. In addition, they developed recommendations for credit institutions, launched a green home program to improve the energy efficiency of households, and cooperate with universities and researchers, he added. He also mentioned that the central bank wants to be at the forefront of greening its own operations and reducing its carbon footprint, and after that he presented a project on the development of a 24-hectare forest area via video. The financial sector performs a control function similar to the brain in the economy, it can play a decisive role if financial institutions are able to switch to green operations and capital flows towards sustainable sectors – concluded Csaba Kandrács at the central bank’s conference.

MTI