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The battle against climate change comes with significant trade-offs for central banks, according to a new report.

Central banks must combat climate change, but all policy options have significant costs, so action must be slow and cautious, according to an umbrella group of the world’s top central banks and managers. “Owing to the heightened uncertainty surrounding the exact timing and magnitude of climate-related risks’ materialisation, the optimal policy for many central banks is likely to be to adopt gradual, predictable, precautionary risk protection measures.” the group said. “Enhancing the disclosure of climate-relevant data is a policy issue that cuts across many of the potential options, while disclosure requirements may be designed by central banks depending on their respective responsibility within their jurisdiction,” the group added.

Source: Reuters

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