Frank Elderson, ECB Vice-Chair, discusses the ECB’s role in climate considerations, risk management in banks, and the importance of financial stability in an interview conducted on April 15, 2026.
Frank Elderson, Member of the Executive Board of the European Central Bank (ECB) and Vice-Chair of the Supervisory Board, was interviewed by Eva Smal on April 15, 2026.
He clarified that the ECB is not a policymaker in climate or nature policies, which are the responsibilities of elected governments. However, the ECB considers climate and nature crises as factors influencing price stability and financial stability.
Elderson highlighted that climate change impacts, such as the Rhine River’s navigability in 2022, directly affect inflation and must be integrated into the ECB’s considerations. He emphasized that the ECB supports understanding the implications of fossil energy dependence and climate risks for price stability.
He explained that banks are required to identify and manage climate-related risks, including those from flooding and water usage, but the ECB does not decide on individual lending activities. The ECB incorporates climate considerations into collateral valuation and economic models, with ongoing evaluations of potential structural instruments like dual interest rates.
Regarding banks’ progress, Elderson noted that by the end of 2024, nearly all supervised banks had mapped climate risks, though some gaps remain, particularly in biodiversity risk assessment. The ECB does not intervene in specific lending decisions but expects banks to manage associated risks responsibly.
He discussed the importance of lessons learned from the 2008 financial crisis, noting that European banks are now stronger, with improved regulation and supervision. Elderson also addressed concerns about international Basel IV capital requirements, advocating for full implementation without race-to-the-bottom practices.
He stressed the importance of completing the banking union, capital markets union, and Single Market to facilitate cross-border financial activities, green investments, and economic resilience. Regarding non-bank lenders, Elderson acknowledged their growing role but emphasized the need for enhanced supervision and transparency to mitigate risks.
Finally, he expressed his commitment to explaining the ECB’s stance on climate and banking stability, stating that his extensive experience allows him to continue advocating for these issues without frustration or frustration.
For more details, visit the original announcement at ECB Press Release.
