Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A senior European Central Bank executive has apologised to colleagues for saying new recruits should be “reprogrammed” to ensure they support its green policies, according to two people who heard his speech.
Frank Elderson told hundreds of the ECB’s banking supervision staff in a town-hall meeting on Monday that he “very much regretted” how some of them had been hurt by his comments.
The apology underlines the central bank’s efforts to repair the damage done by Elderson’s initial outburst, which triggered complaints from ECB staff representatives and members of the European parliament that it was taking an “autocratic” and “biased” approach to green issues.
The problems started at an internal meeting last month, when Elderson expressed frustration at how little some new recruitments know about climate change. “Why would we want to hire people whom we have to reprogramme because they came from the best universities but still don’t know how to spell the word ‘climate’,” he said. “I don’t want these people anymore.”
The Dutchman, who has played a leading role in the ECB’s push to tackle the financial risks of climate change since joining its board in late 2020, told Monday’s town hall meeting that “some people . . . have been hurt” by his comments and “I very much regret that.”
“I wish I had used other words [because] they cannot really be more contrary to what I really stand for,” he added. Drawing applause from the audience, he went on to say that he believed the ECB should take a “fact- and science-based” approach to climate change while remaining open to challenge and debate.
The ECB’s staff committee said in a letter to the board last week that “many colleagues were shocked by the choice of words” and that the idea of “reprogramming” people was “in direct contradiction to the democratic values the ECB and EU stand for”.
The European parliament last month called on the ECB to investigate Elderson’s initial statement and to “swiftly address any suspicions of ideological bias” in a resolution it passed on the central bank’s annual report.
The ECB, which declined to comment, is hoping the mea culpa by Elderson will be enough to draw a line under the issue and it is not planning to take any further action.
People who know Elderson believe his initial comments reflected frustration at how some recruits know few of the scientific facts behind climate change. He said in a memo sent to staff last week that instead of “reprogramming” he meant to say that staff needed “training”.
While some central banks such as the US Federal Reserve have taken a cautious approach to green issues, Elderson has made them a major focus in his role as vice-chair of the ECB’s supervisory board, which oversees the eurozone’s biggest banks.
He recently warned 20 banks that the ECB would impose daily fines if they did not start to assess and tackle climate risks soon. He has also called for the ECB to consider a green shift in both its €4.7tn bond portfolio and in its cheap financing for commercial banks.
The ECB decided in its 2022 strategic review, led by president Christine Lagarde, that it was within its mandate to tackle risks arising from climate change as long as these do not impair its main objective of price stability. Some critics argued that policymakers’ focus on green issues distracted them from containing inflation, which surged above 10 per cent — a record — in the eurozone in 2022.
Read the full article here
