So, the ECB is trying to turn green. I'm not sure this is a good idea. Even if there are market imperfections, it is not the purpose of the ECB to fix market perfections that are not directly linked to her monetary policy goals. 1/ https://www.ft.com/content/7f73b22c-fded-4be3-a92e-220f443df223

Is there any democratic legitimization for such an expansion of the ECBs mandate? Can the ECB now use any perceived market imperfection to influence financing conditions, in any area? That seems to be a significant encroachment beyond the monetary policy mandate. 2/

And it's not as easy to implement what the ECB promises. Let's take a simple example. Let there be two car manufacturers, A and B. A is decarbonizing its fleet quickly by sticking to an available technology, such as currently available battery technology. 3/

B decarbonizes more slowly, because it leap-frogs on the current technology and instead decides to invest into the development of a much more efficient next-generation technology. If successful, Bs contribution to decarbonization would come later, but be much larger. 4/

Do we want to the ECB to discriminate against B, and exclude B from corporate bond purchases? Would that be efficient? And would the ECB set the correct incentives if it acted this way? 5/

I think we're witnessing an arrogation of competencies that the ECB does not and should not have, because they open the door to an economic micro-management by the central bank. And that not only leads to pretense of knowledge of extraordinary dimensions, 6/

but it is also highly problematic to let a non-democratically controlled organization do this. 7/7