London, 13th March 2023
On the collapse of Silicon Valley Bank (SVB), Simon Youel, Head of Policy and Advocacy at Positive Money, commented:
“The fact that firms’ ability to make payroll is dependent on the solvency of banks like SVB illustrates one of the biggest problems that a public digital pound would solve.
“Alongside physical cash, a digital pound would ensure that all households and businesses have direct access to fully risk-free public money, ending the reliance on banks to access our money and make payments. It would put an end to questions of moral hazard by ensuring the public good of the payments system is protected from the risk-taking of private banks.”
On the Bank of England’s report on climate-related risks and the regulatory capital frameworks, Simon Youel, Head of Policy and Advocacy at Positive Money, commented:
“After regulators have recently been found asleep at the wheel on SVB, as well as on the fragility of pension funds back in September, it is concerning that the Bank of England is also delaying essential changes to capital frameworks to ensure they protect the public against climate risks.
“The Bank has finally accepted that climate risks have “unique characteristics”, including “non-linearities and feedback loops”, that make them hard to predict and that may require more “forward looking” tools. But a fossil fuel-driven banking crisis in the next decade could cost over £4 trillion in public bailouts, and there is no time for further delay.”
- Bank of England ‘Statement on Silicon Valley Bank”, Monday 13th March 2023: https://www.bankofengland.co.uk/news/2023/march/statement-on-silicon-valley-bank
- The UK is currently consulting on the introduction of a digital pound, though the House of Lords has previously criticised the concept as a ‘solution looking for a problem’ https://www.parliament.uk/business/lords/media-centre/house-of-lords-media-notices/2022/january-2022/central-bank-digital-currencies-a-solution-in-search-of-a-problem/
- Bank of England report on climate-related risks and the regulatory capital frameworks, Monday 13th March 2023: https://www.bankofengland.co.uk/prudential-regulation/publication/2023/report-on-climate-related-risks-and-the-regulatory-capital-frameworks
- 13.6 million people could lose their job worldwide in the next financial crash driven by fossil fuels. $4.9 trillion of taxpayers’ money might be needed to rescue banks if the fossil fuel market crashes in the next decade. One for One campaign, “Banking on Bailouts” report, 12 Jan 2023: https://oneforonenow.org/sites/default/files/2023-01/Banking%20on%20Bailouts%2C%20Sizing%20the%20social%20costs%20when%20the%20carbon%20bubble%20bursts-12Jan22.pdf