Responding to the news that Labour is setting up a review of the financial system which will examine how an enhanced Bank of England toolkit could tackle the financial stability threat of climate breakdown, Fran Boait, executive director of Positive Money, said:
“With the shadow chancellor’s comments coming the week after the future of finance report called for the Bank of England to rethink its priorities, it appears a new settlement for our financial system is in the making.
“Though the Bank rightly recognises the existential threat climate breakdown poses to financial and economic stability, it has shied away from taking the necessary action, frequently citing the constraints of its mandate and toolkit.
“As regulator of our financial system, the central bank has the ability to shape markets, penalising lending towards destructive carbon bubbles and incentivising productive green investment through policies such as credit guidance. But it is incumbent on the government to empower it to do so.
“Labour is right to look at updating the Bank of England’s toolkit to meet the challenges of the 21st century. The government must now follow suit.”
Notes to editors
The Bank of England commissioned future of finance report, which called for an overhaul of the Bank of England’s agenda, toolkit and capabilities was published on Thursday 20 June.
John McDonnell this morning announced the setting up of a review group to overview the financial system as it currently relates to the climate emergency. The full speech can be viewed here
Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org
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