Euro, the favorite currency for issuing green bonds
The second most used asset in the world maintains its hegemony as a global reserve currency
The euro gained strength in 2019 as the second most used currency in the world, which maintains its hegemony as a global reserve currency without question, except in the field of green bond issuance, where euro-denominated issues again led the market.
According to data provided by the European Central Bank (ECB), in the last year, 45.4% of “green” bond issues made worldwide were denominated in euros, compared to 25.7% in dollars and 28.9% in the rest of the currencies.
Likewise, the ECB data confirmed the leadership of the euro in terms of relative importance compared to other bonds, since the proportion of the green bonds in relation to the total issuance of euro bonds increased to almost 9% at the end of 2019, compared to 2.1% for dollar bonds and around 2.5% for bonds in other currencies.
As the euro is already the main denomination currency for green bond issuance, consolidating the role of the European Union as a global center for finance could strengthen the euro as the currency of choice for sustainable financial products, reinforcing its international role, according to what the ECB defends.
Fabio Panetta, Italian representative on the Executive Board of the ECB, reported that “the rapid implementation of a European Union taxonomy of sustainable economic activities would provide a credible and standardized framework, would give greater investor confidence and therefore it could also contribute to strengthening the international role of the euro.”
Taken and with information from El Sumario
