Ambrose, Bank of England, ECB, Solar
and $20tn-$30tn assets and $7tn debts of the global fossil complex While politicians across Europe have been fighting a culture war over air conditioners and the causes of the deadly heat shock, central banks have been taking matters into their own hands. The Bank of England has slipped through market notice 11, entitled “Changes to collateral eligibility in the Sterling Monetary Framework”. Fossil fuel companies will face bigger haircuts from October onwards. Their debt will be worth less as collateral for borrowing money or securing a trade, depending on how far along they are on the green-to-brown spectrum. Lenders will also have to integrate the financial risks of climate change in their stress testing and models. “The direction of travel is clear. Banks are going to have to set aside more capital when lending to some fossil companies,”. The European Central Bank (ECB) is acting in parallel, using pillar two of the global “Basel regime” to squeeze loans to high polluters and s...
