Book contents
- Making the Financial System Sustainable
- Making the Financial System Sustainable
- Copyright page
- Contents
- Figures
- Tables
- Boxes
- Contributors
- Foreword
- Preface
- Introduction
- 1 Capitalism Meets Multilateralism
- 2 Public Meets Private
- 3 Central Banking and Climate Change
- 4 Sustainable Finance and Prudential Regulation of Financial Institutions
- 5 Transparency and Accountability Standards for Sustainable and Responsible Investments
- 6 Environmental Risk Analysis by Financial Institutions
- 7 Sustainable Governance and Leadership
- 8 ESG Risks and Opportunities
- 9 Active and Responsible
- 10 Passive-Aggressive or Just Engaged
- 11 Financing a Just Transition
- 12 Sustainable Finance for Citizens
- 13 Individual Impact Investors
- 14 Strengthening Green Finance by Better Integrating the Social Dimensions in the European Union’s Sustainable Finance Laws
- Index
- References
3 - Central Banking and Climate Change
Published online by Cambridge University Press: 30 October 2020
Edited by
Book contents
- Making the Financial System Sustainable
- Making the Financial System Sustainable
- Copyright page
- Contents
- Figures
- Tables
- Boxes
- Contributors
- Foreword
- Preface
- Introduction
- 1 Capitalism Meets Multilateralism
- 2 Public Meets Private
- 3 Central Banking and Climate Change
- 4 Sustainable Finance and Prudential Regulation of Financial Institutions
- 5 Transparency and Accountability Standards for Sustainable and Responsible Investments
- 6 Environmental Risk Analysis by Financial Institutions
- 7 Sustainable Governance and Leadership
- 8 ESG Risks and Opportunities
- 9 Active and Responsible
- 10 Passive-Aggressive or Just Engaged
- 11 Financing a Just Transition
- 12 Sustainable Finance for Citizens
- 13 Individual Impact Investors
- 14 Strengthening Green Finance by Better Integrating the Social Dimensions in the European Union’s Sustainable Finance Laws
- Index
- References
Summary
Sets out what central banks can and must contribute to the sustainability agenda, especially on climate change, given their existing mandates and objectives. That includes monetary policy, financial stability, prudential regulation, balance sheet-management and even bank notes. Central banks do not need and should not wait for changes to their legal duties, because climate change is a material influence on all their existing responsibilities. Meanwhile, macroeconomic stability is a pre-requisite for the wider sustainability agenda and so there needs to be a continuing priority focus on monetary and financial stability.
Keywords
- Type
- Chapter
- Information
- Making the Financial System Sustainable , pp. 49 - 74Publisher: Cambridge University PressPrint publication year: 2020
References
Alexander, K. (2014), ‘Stability and Sustainability in Banking Reform: Are Environmental Risks Missing in Basel III?’, Cambridge/UNEP, October. www.cisl.cam.ac.uk/resources/sustainable-finance-publications/banking-regulation.Google Scholar
Alexander, K. and Fisher, P. G. (2019), ‘Banking Regulation and Sustainability’. In: Beekhoven van der Boezem, F.-J., Jansen, C. and Schuijling, B. (eds.), Sustainability and Financial Markets, pp. 7–32. Law of Business and Finance Volume 17. Wolters Kuwer, Netherland B.V.Google Scholar
Aliber, R. Z. and Kindleberger, C. P. (2015), Manias, Panics and Crashes, Palgrave Macmillan, UK, 7th ed.Google Scholar
Bank of England (2013), ‘LCA of Paper and Polymer Bank Notes’ available, along with other relevant papers at: www.bankofengland.co.uk/banknotes/polymer-banknotes.Google Scholar
Bank of England (2017), ‘Carbon Footprint Assessment: Paper vs. Polymer £5 & £10 Bank Notes’. www.bankofengland.co.uk/-/media/boe/files/banknotes/polymer/carbon-footprint-assessment.pdf?la=en&hash=A2077D4BEF302DF8F8488503DEA041876627ECBD.Google Scholar
Bank of England (2019), ‘The 2021 Biennial Exploratory Scenario on the Financial Risks from Climate Change’. www.bankofengland.co.uk/paper/2019/biennial-exploratory-scenario-climate-change-discussion-paper.Google Scholar
Carney, M. (2015), ‘Breaking the Tragedy of the Horizon – Climate Change and Financial Stability’, speech to Lloyd’s of London, September. www.bankofengland.co.uk/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability.Google Scholar
Cœuré, B. (2018), ‘Monetary Policy and Climate Change’, speech at the Bundesbank-NGFS-CEP Conference on ‘Scaling up Green Finance: The Role of Central Banks’, Berlin, 8–9 November 2018. www.ecb.europa.eu/press/key/date/2018/html/ecb.sp181108.en.html.Google Scholar
Debelle, G. (2019), ‘Climate Change and the Economy’, speech, 12 March. www.rba.gov.au/speeches/2019/pdf/sp-dg-2019-03-12.pdf.Google Scholar
Draghi, M. (2020), ‘Draghi: we face a war against coronavirus and must mobilise accordingly’,Financial Times, March. https://www.ft.com/content/c6d2de3a-6ec5-11ea-89df-41bea055720b?shareType=nongift.Google Scholar
ECB (2018), Transcript of hearing: Committee on Economic and Monetary Affairs monetary dialogue with Mario Draghi, President of the European Central Bank. https://www.ecb.europa.eu/pub/pdf/annex/ecb.sp180709_transcript.en.pdf?d0bd98150affdcbcd1ea9e80f128b90b.Google Scholar
Eichengreen, B. (1999), Toward a New International Financial Architecture: A Practical Post-Asia Agenda, Peterson Institute Press, Washington, DC.Google Scholar
European Banking Federation (2018), ‘Green Finance: Considering a Green Supporting Factor’, January. www.ebf.eu/wp-content/uploads/2017/09/Geen-finance-complete.pdf.Google Scholar
European Commission (2018a), ‘Final Report of the High-Level Experts Group on Sustainable Finance’, Brussels, January. https://ec.europa.eu/info/publications/180131-sustainable-finance-report_en.Google Scholar
European Commission (2018b), ‘Action Plan: Financing Sustainable Growth’, March. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018DC0097&from=EN.Google Scholar
Financial Conduct Authority (2018), ‘Climate Change and Green Finance’, Discussion Paper, October. www.fca.org.uk/publications/discussion-papers/dp18-8-climate-change-and-green-finance.Google Scholar
Fisher, P. G. (2013), ‘Financial Markets, Monetary Policy and Credit Supply’, speech given at Richmond University, London, October. www.bankofengland.co.uk/-/media/boe/files/speech/2013/financial-markets-monetary-policy-and-credit-supply.pdf?la=en&hash=1AE9D84BD3CC1A8E0B3FCCDB13EDE6063CBA26C9.Google Scholar
Fisher, P. G. and Hughes Hallett, A. J. (2018), ‘Can Central Bank Balance Sheets Be Used as a Macroprudential Tool?’ King’s Business School, DAFM Working Paper, 2018/6. www.kcl.ac.uk/business/assets/pdf/dafm-working-papers/dafm-wp6.pdf.Google Scholar
H M Treasury (2018), ‘Remit for the Monetary Policy Committee Attached to a Letter from the Chancellor of the Exchequer to the Governor of the Bank of England’. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752077/PU2207_MPC_remit_web.pdf.Google Scholar
Hornbeck, R. (2012), ‘The Enduring Impact of the American Dust Bowl: Short and Long Run Adjustments to Environmental Catastrophe’, American Economic Review 102 (4), 1477–1507.CrossRefGoogle Scholar
Hutley, N. and Hartford-Davies, S. (2016), ‘Climate Change and Directors’ Duties’, Memorandum of Opinion published by the Centre for Policy Development and the Future Business Council via Minter Ellison, Solicitors, Melbourne, October. https://cpd.org.au/wp-content/uploads/2016/10/Legal-Opinion-on-Climate-Change-and-Directors-Duties.pdf.Google Scholar
International Monetary Fund (2019), ‘Annual Report on Exchange Arrangements and Exchange Restrictions 2018’. www.imf.org/en/Publications/Annual-Report-on-Exchange-Arrangements-and-Exchange-Restrictions/Issues/2019/04/24/Annual-Report-on-Exchange-Arrangements-and-Exchange-Restrictions-2018-46162.Google Scholar
International Panel on Climate Change (2018), ‘Global Warming of 1.5°C: Summary for Policymakers’, Geneva. www.ipcc.ch/site/assets/uploads/sites/2/2018/07/SR15_SPM_version_stand_alone_LR.pdf.Google Scholar
Lagarde, C. (2019), ‘Hearing at the Committee on Economic and Monetary Affairs of the European Parliament’. www.ecb.europa.eu/press/key/date/2019/html/ecb.sp191202~f8d16c9361.en.html.Google Scholar
Lambert, C., Noth, F. and Schüwer, U. (2017), ‘How Do Banks React to Increased Credit Risk? Evidence from Hurricane Katrina’, SAFE Working Paper No. 94, Goethe University, Frankfurt. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2585521.Google Scholar
Landon-Lane, J., Rockoff, H. and Steckel, R. H. (2011), ‘Droughts, Floods and Financial Distress in the United States’. In: Libekap, G. D. and Steckel, R. H. (eds.), The Economics of Climate Change: Adaptations Past and Present, pp. 73–84. The University of Chicago Press.Google Scholar
Lloyd’s of London (2014), ‘Catastrophe Modelling and Climate Change’. www.lloyds.com/news-and-risk-insight/risk-reports/library/natural-environment/catastrophe-modelling-and-climate-change.Google Scholar
Mersch, Y. (2019), ‘Back to Stable’, Frankfurt am Main. www.bis.org/review/r190529a.pdf.Google Scholar
Nordhaus, W. D. (2013), The Climate Casino: Risk, Uncertainty, and Economics for a Warming World, Yale University Press, New Haven, CT.Google Scholar
Peng, H., Xiaoqing, L. and Chaobo, Z. (2018), ‘Introduction to China’s Green Finance System’, Journal of Social Science and Management 11, 94–100, 96.Google Scholar
People’s Bank of China (2015), Notice on Green Financial Bonds, PBOC Document No. 39. www.climatebonds.net/files/files/China_Annual_Report_2017_English.pdf.Google Scholar
Prudential Regulation Authority (2015), ‘The Impact of Climate Change on the UK Insurance Sector, a Climate Change Adaption Report by the Prudential Regulation Authority’, September. www.bankofengland.co.uk/prudential-regulation/publication/2015/the-impact-of-climate-change-on-the-uk-insurance-sector.Google Scholar
Prudential Regulation Authority (2018a), ‘Transition in Thinking: The Impact of Climate Change on the UK Banking Sector’, September. www.bankofengland.co.uk/prudential-regulation/publication/2018/transition-in-thinking-the-impact-of-climate-change-on-the-uk-banking-sector.Google Scholar
Prudential Regulation Authority (2018b), ‘Enhancing Banks’ and Insurers’ Approaches to Managing the Financial Risks from Climate Change, Consultation Paper 23/18. www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2318.pdf?la=en&hash=8663D2D47A725C395F71FD5688E5667399C48E08.Google Scholar
Reuters (2014), ‘Euro Banknotes Will Remain Paper Not Plastic’. www.reuters.com/article/us-euro-fakes/euro-banknotes-will-remain-paper-not-plastic-idUSBREA0C0JQ20140113.Google Scholar
Stern, N. (2006), The Economics of Climate Change: The Stern Review, https://webarchive.nationalarchives.gov.uk/20100407172811/http://www.hm-treasury.gov.uk/stern_review_report.htm. Print edition (2007), Cambridge University Press.Google Scholar
Task Force on Climate-Related Financial Disclosures (2017), ‘Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures’, FSB, June. www.fsb-tcfd.org/publications/final-recommendations-report.Google Scholar
Task Force on Climate-Related Financial Disclosures (2018), ‘2018 Status Report’, FSB, September. www.fsb-tcfd.org/publications/tcfd-2018-status-report.Google Scholar
Task Force on Climate-Related Financial Disclosures (2019), ‘2019 Status Report’, FSB, June. www.fsb-tcfd.org/wp-content/uploads/2019/06/2019-TCFD-Status-Report-FINAL-053119.pdf.Google Scholar
UNEP FI and PRI (2011), ‘Universal Ownership: Why Environmental Externalities Matter to Institutional Investors’, United Nations Environment Programme Finance Initiative and Principles for Responsible Investment. www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf.Google Scholar
World Economic Forum (2013), ‘The Green Investment Report – The Ways and Means to Unlock Private Finance for Green Growth’, Geneva. www3.weforum.org/docs/WEF_GreenInvestment_Report_2013.pdf.Google Scholar
World Economic Forum (2019), ‘The Global Risks Report 2019’, Geneva, January. www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf.Google Scholar
- 4
- Cited by