According to European Central Bank's President Christine Lagarde, the European Central Bank should ask the question: is reflecting on the structure of the bond market when buying assets appropriate in light of climate risks?

She was referring to whether investors are correctly evaluating bonds issued by companies that are harmful to the environment.

As the European Union insists on an aggressive plan of action to ensure the continent's climate neutrality by mid-century, these assets could fall in value, posing a risk to the central bank's balance sheet.

The ECB is currently evaluating its policies, looking at issues from measuring inflation to climate change.

For years, the ECB has been criticized for its incentives leaning toward supporting brown industries because these companies have issuing corporate bonds extensively and the ECB has insisted that its purchasing programs should be without discriminating against certain industries.

During the Lagarde administration, which came in November last year, many noticed how monetary policy was gradually reallocated towards a clean environment.

Lagarde said in an online speech last Wednesday: "Should market neutrality be the de facto principle that drives our monetary policy portfolio? I am not condemning the fact that it should no longer be, but it justifies the question and this is what we are going to do as part of the revision of our strategy. "

Her comments echo those of Executive Board member Isabelle Schnabel. In a recent speech, she said that "In the presence of market failures, market neutrality may not be a suitable benchmark for the central bank when the market itself does not achieve effective results."

Despite the fact that many agree that they can and should contribute to the fight against climate change, some, including Schnabel, have highlighted the lack of common definitions of what constitutes sustainable Finance as a problem has been hampering the ECB's ability to pursue greener policies. Others, such as governing Council member Jens Weidmann, argued that the central bank should not shape climate efforts, but rather the role of governments.

The European Central Bank should review its monetary analysis, possibly by including indicators such as financial company assets and nominal GDP growth, Bank of France Governor Francois Villeroy de Gallo said on Wednesday

Monetary analysis is currently playing second fiddle to economic analysis as part of decisions by the ECB's governing council, leading some to question whether it should be abandoned.

Francois Villebois de Gallo said it could instead be expanded as part of a strategic review by the ECB.

"We need to rethink the current monetary analysis-- especially in light of financial stability concerns," Francois Villeroy de Gallo said at an online conference. "Among the indicators of the financial sector, the ECB could take a closer look at the assets of financial institutions, including non-bank ones."

The ECB could also consider other economic indicators, such as nominal gross domestic product growth, which are often used to measure the sustainability of both private and public sector debt. Employment and income distribution can also be considered.

As for the current monetary policy, Villeroy said that it is acceptable but added that the ECB is ready to "take additional actions if necessary."