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UPDATE 1-Swiss National Bank limited in ability to help environment - Maechler

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ZURICH, Oct 27 (Reuters) - The Swiss National Bank is limited in its ability to promote environmental goals, governing board member Andrea Maechler said, and using monetary policy to support a greener economy would reduce the central bank's effectiveness.

"Some people say monetary policy tools could be used on the margin to move in the right direction," Maechler said in a video interview for the University of St. Gallen (USG).

"But we notice when we use monetary policy tools for that purpose, they may be helpful to move in that direction, but are detrimental to the effectiveness of monetary policy," she added. "And the SNB is the only institution that can conduct monetary policy."

The SNB has close to 1 trillion Swiss francs ($1.09 trillion) in foreign currency investments, including stocks and bonds of companies. Campaigners have said the central bank could use its influence as one of the world's largest investors to influence companies contributing to climate change.

Maechler, who is due to speak about climate change and the finiancial markets at a USG event later on Wednesday, said the issue was important in how it affected economic growth, business cycles and inflation.

She cited the example of how low water levels on the River Rhine could impact prices of goods imported by boat into Switzerland.

The European Central Bank earlier this year said it would further incorporate climate change considerations into its monetary policy, including on disclosure, risk assessment, and decisions on collateral and corporate sector asset purchases.

The SNB currently excludes buying the bonds and shares of companies primarily involved in the mining of coal, and invests in green bonds, Maechler said.

But actively promoting a green economy was not the SNB's role, Maechler said.

"That is not our mandate. In fact it could bring a conflict of interest," she said. "We don't have the right tools to promote a green economy. The right tools would be taxation, regulation, that is not something we have."

($1 = 0.9164 Swiss francs) (Reporting by John Revill; editing by Brenna Hughes Neghaiwi)