MEPs have asked the European Central Bank to step up its green credentials and address growing financial technology challenges.

The resolution, setting out Parliament’s priorities on the European Central Bank‘s (ECB) future policies, was approved earlier this month. In order to boost the slowing EU economy and encourage growth, MEPs asked the ECB to continue to expand the overall money supply. However, sustainable growth cannot be achieved through monetary policy alone and EU member states still need their own fiscal policies and to implement economic reforms, says the resolution.

Furthermore, low or negative interest rates have a harmful impact on pensions and insurance systems, they add. Parliament also notes the importance of continuing with the ECB’s preparatory efforts to ensure EU financial markets remain stable after the withdrawal of the UK from the EU.

Bring ECB policies in line with Paris Agreement

The European Parliament called on the ECB to better integrate environmental, social and governance (ESG) principles into its policies and redesign its corporate sector purchase programme (CSPP) to better support environmentally sustainable initiatives. MEPs deplored that green bond issuance still accounts for only 1% of the overall supply of euro-denominated bonds, while a majority (62.1%) of ECB corporate bond purchases remain in sectors that are responsible for 58.5% of euro area greenhouse gas emissions.

Digital currencies and anti-money laundering

The resolution also invites the ECB to step up its efforts to combat money laundering, tax evasion and other forms of financial crimes, by creating a system to better monitor large transactions. MEPs also noted the need to monitor crypto-assets more closely. In collaboration with the Commission, the ECB should assess the EU legal and regulatory framework on e-money, financial instruments and virtual currencies/assets.