Central Bankers and animal analogies: From hawks/doves to green swans

Danae Kyriakopoulou in this OMFIF piece:

Central bankers have long been associated with birds, traditionally divided between inflation-worried hawks or employment-leaning doves. More recently a third species, the ‘green swan’, has entered the conversation. Here, central bankers are increasingly united.

‘Green swan’ was coined by authors at the Bank for International Settlements in January 2020 to characterise the new type of systemic risks from climate change. The term is inspired by Nassim Nicholas Taleb’s concept of ‘black swan’ during the 2008 financial crisis to connote rare, catastrophic and unpredictable events. However, the main difference between the concepts is that a green swan will not be a rare event in the face of inaction, it will be a certainty.

In the central banks and climate change agenda, a year is a long time. Since the publication of the BIS paper, central bankers have made over 50 speeches where climate change has been the main focus. In the last two years, the Central Banks and Supervisors Network for Greening the Financial System have published 17 new reports. And there have been numerous conferences and roundtables, many organised by OMFIF’s Sustainable Policy Institute, established in September 2020.

These culminated in the Green Swan conference last week, with a total of 35 sessions over three days. Discussions ranged from the role of central banks in addressing climate change to biodiversity, the just transition and smart cities. The world’s leading central bankers took the stage, including the heads of the Federal Reserve, People’s Bank of China and European Central Bank. 

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