However, it’s crucial that these eligibility principles are as market-neutral as possible. Arbitrary penalties would open the door to all sorts of whimsical assessments. Today’s ECB might choose to be harsh with oil and gas companies on the basis that one day they’ll be shunned by investors and regulators. Tomorrow’s policymakers might use that precedent to take a tougher stance against a high-debt country, if they feared it was headed for trouble.

It’s fine for the ECB to include “green bonds” in its purchases — as it does presently — but it should go no further. Quantitative easing has been controversial enough, even as the ECB implemented it with laudable impartiality. Fanning those flames would be a terrible move by Lagarde.

This opinion piece was provided by Bloomberg News.

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