New book out now! Making the Financial System Sustainable

Available from Cambridge University Press. Enter MFSS2020 at checkout to get 20% off.

The EU Action Plan on Financing Sustainable Growth is the most advanced and comprehensive policy agenda on sustainability in the world. But is it going in the right direction? Acting as a bridge between policy and academia, this up-to-date contribution to the global policy debate brings together some of the leading experts from the European Commission’s High-Level Expert Group on Sustainable Finance, to discuss how the financial system needs to be reformed to promote sustainability. Finance has long been criticized for being short-term focused and concerned with maximizing returns to intermediaries, rather than with the interests of savers and borrowers. The financial system must now take into account environmental, social and governance considerations to support a sustainable economy and this volume offers new insights on the way forward. A must-read for anyone working on financial sector policy and sustainability.

Contents:
Contributors;
Foreword (Christian Thimann);
Preface (Paul Fisher);
Introduction (Paul Fisher and Kajetan Cyyz);
1. Capitalism meets multilateralism; (Paddy Arber and Steve Waygood)
2. Public meets private: sustainable finance for a sustainable economy;
(Ingrid Holmes)
3. Central banking and climate change; (Kern Alexander and Paul Fisher)
4. Sustainable finance and prudential regulation of financial institutions;
(Esko Kivisaari)
5. Transparency and accountability standards for sustainable and responsible investments; (Flavia Micilotta)
6. Environmental risk analysis by financial institutions;
(Nina Seega and Andrew Voysey)
7. Sustainable governance and leadership;
(Claudia Kruse and Michael Schmidt)
8. ESG risks and opportunities: a fiduciary duty perspective;
(Will Martindale, Elodie Feller and Rory Sullivan)
9. Active and responsible: a cost efficient model for integrating sustainability;
(Magnus Billing and Carina Silberg)
10. Passive-aggressive or just engaged: new active ownership approaches through benchmarks;
(David E. Harris)
11. Financing a just transition: how to connect the environmental and social dimensions of structural change;
(Nick Robins)
12. Sustainable finance for citizens;
(Anne-Catherine Husson-Traore)
13. Individual impact investors: the silenced majority;
(Stan Dupre)
14. Strengthening green finance by better integrating the social dimensions in the EU’s sustainable finance laws.
(Myriam Vander Stichele)

Webinar on the importance of central bank balance sheets

To promote the Masters Degree in Central Banking and Financial Regulation, from the University of Warwick co-sponsored by the Bank of England. We will be holding a webinar on 20th May 2020.

Central bank balance sheets are not well understood – but not only do they define the central bank, they are the most powerful weapon in it’s armoury.

It’s balance sheet enables a central bank to set interest rates, issue bank notes, act as lender of last resort, underpin the banking payments system and control the supply of base money.

In the context of Covid-19, it is the CB balance sheet that is being used to support the real economy, through monetary expansion and the supply of cheap credit. This has echoes for the policy support during the Great Financial Crisis and the sluggish recovery.

If you have questions about what central banks are doing, this is the time and place to ask.

Important Speech by Guy Debelle, Reserve Bank of Australia on climate change and the economy

Not many central bankers have yet tested the (rising) waters by speaking about monetary policy in the context of climate change. Benoit Coeure, ECB, made some references in November 2018, mostly in relation to ECB operations. That speech is available here: https://www.ecb.europa.eu/press/key/date/2018/html/ecb.sp181108.en.html.

But Guy Debelle – Senior Deputy Governor of the RBA – has put the topic firmly on the central banking map with a great speech covering the ground comprehensively. Its available at the following link https://www.rba.gov.au/speeches/2019/sp-dg-2019-03-12.html

What makes this a particularly important intervention is that some in Australia, particularly the vested interests of the coal industry, would treat climate concerns as a political issue, in order to resist the necessary changes. But APRA and RBA are showing that it is a mainstream economic and financial risk issue that the relevant authorities need to tackle, consistent with their existing remits.