Central Banks and Regulators’ Role in Greening the Financial System

Aug. 15, 2019 (EIRNS)— While working to implement their global fascist green dictatorship, the financial oligarchy is aware of the danger that, by depreciating CO2-linked assets, or by doing it too fast, banks cannot absorb losses and the system can blow up. They call this a “Minsky moment” and in the effort to avoid that, central bankers and regulators set up an ad hoc group, called “Network for Greening the Financial System” (NGFS.)

The NGFS was created at the COP21 by eight central banks and supervisors and now has 42 members and 8 observers. Its stated purpose is “to help strengthening the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development.”

Its mastermind seems to be Bank of England Governor Mark Carney. The Steering Committee is heavily populated by Northern European institutions: Bank of England, Banque de France, Bundesbank, De Nederlandsche Bank, Finansinspektionen (Swedish Financial Supervisory Authority); the Bank al Maghrib (Morocco, francophone), Banco de México, the Monetary Authority of Singapore and the People’s Bank of China are also members of the steering committee. Its website is hosted by the Banque de France.

On April 17, 2019, the NGFS published its first comprehensive report “A Call for Action,” whose recommendations were summarized in an article by Carney, Banque de France Governor François Villeroy de Galhau, and NGFS head Frank Elderson:

“First, integrate the monitoring of climate-related financial risks into day-to-day supervisory work, financial stability monitoring and board risk management. Supervisors are encouraged to set expectations to ensure financial firms are adequately addressing the financial risks from climate change, including by conducting scenario analysis to assess their strategic resilience to climate change policy. Firms are encouraged to take a long-term, strategic approach to the consideration of these risks, and to embed them into their business-as-usual governance and risk-management frameworks.

“Second, lead by example, specifically central banks are encouraged to integrate sustainability into their own portfolio management.

“Third, collaborate to bridge the data gaps to enhance the assessment of climate-related risks. Public authorities should share and if possible make publicly available any climate-risk data.

“Fourth, build in-house capacity and share knowledge with other stakeholders on management of climate-related financial risks. An important element to achieving effective consideration of climate risks across the financial system is to support internal and external collaboration.”