This chapter maps the European landscape of green finance, situating green bonds within a broader architecture that spans green and sustainability-linked loans and bonds (SLB/SLL), blue finance (blue bonds and loans), environmental impact bonds, green credit lines, green equity, and retail channels such as crowdfunding. It synthesises the policy drivers behind Europe’s leadership—taxonomy-based classification and disclosure regimes (e.g. SFDR) under the Green Deal—while documenting rapid market scaling alongside vulnerabilities: greenwashing incentives, data fragmentation, and cross-country heterogeneity. The chapter distinguishes use-of-proceeds, performance-linked, and outcome-based designs and explains how eligibility criteria, external reviews, and ex post impact reporting (MRV) support investor trust and allocative efficiency. It clarifies the role of carbon pricing and markets—cap-and-trade (EU ETS) versus offsets—and the contribution of carbon-finance derivatives to hedging and liquidity. Finally, it offers a risk map (standardisation gaps, verification quality, reputational and regulatory exposure) and a policy agenda centred on taxonomy alignment, comparable metrics, and robust assurance. A recent strand of evidence from pan-European credit registers shows that public loan guarantees (PGL) introduced during COVID-19 tilted credit supply towards low-emission firms by relaxing monitoring constraints, highlighting both the information-production cost of green lending and the importance of programme design for portfolio greening (Buchetti et al., Loan guarantee and portfolio greening: evidence from European credit registers, 2025). The contribution is a system view: Instruments are effective when embedded in credible standards, data governance, and incentive-compatible programmes that connect capital to measurable environmental outcomes.