Indian Top Economist: Central Banks Must Not Advocate Green over Brown

Raghuram Rajan, the former Reserve Bank of India governor and former chief economist at the IMF, told the Global Markets Forum sponsored by Reuters today that central banks should not mandate ‘green’ investments. “Asking the central bank to say you should buy only green bonds, not brown bonds, etc., is asking the central bank to impose its own views on something which is primarily a fiscal matter,” he said. He added that central banks should instead turn their focus to the financial stability of these green investments and other threats such as crypto currencies and cyber security.