Humanity has entered a new era of environmental crises, the impacts of which are beginning to affect our commons with increasing severity. Heatwaves are becoming more intense and prolonged, and disruptions and disasters related to climate change and ecosystem degradation are occurring more frequently. In Peru, these crises may exacerbate the food insecurity that already affects more than half of the population. This article examines the main issues surrounding the controversy regarding the role that central banks could and should play in steering economies toward a sustainable direction.
On one hand, there are those who advocate for a more active role for central banks, including the establishment of environmental criteria in their collateral frameworks and asset purchase programs, engagement in targeted longer-term financing operations, and management of their portfolios and other internal processes based on these criteria. On the other hand, opponents argue that this reorientation would distract central banks from their core mission, exposing them to politicization and jeopardizing their independence. According to this view, central banks have no role in fostering the transition to a new type of financial commons.
However, surveys conducted by the Network for Greening the Financial System (NGFS) reveal that some central banks—primarily in the European Union—are already taking steps to integrate climate change criteria into their monetary policy operational frameworks. In other regions, progress in this direction has been rather limited, against a backdrop where central banks operate through the infrastructural power of private finance and are subject to cultural and political constraints.
This article focuses on the institutional design and governance of central banks, specifically referencing the Peruvian case. It will argue that the Peruvian central bank needs to strengthen its governance to address new challenges effectively, in coordination with other actors, by operating under a collegial direction and adhering to higher standards of procedural transparency. This is essential for reinforcing its legitimacy and effectiveness in addressing complex collective action problems and ultimately fulfilling its mandate.
