City regulators get new climate duties despite promise to cut red-tape
Labourʼs economic chief gives Bank of England new green-focused responsibilities while promising less regulation. Fresh mandate requires financial institutions to handle climate-related risks more strictly
In a surprising policy-shift Rachel Reeves has ordered City regulators to focus on climate issues‚ despite her earlier statements about cutting down regulations. The labour chancellor sent instructions to various financial bodies including Bank of England on nov 15th that puts green policies as top-priority
The Bankʼs new duties include checking how well banks can deal with climate-change effects (which adds to its already-full plate of responsibilities). In her message to Andrew Bailey the Bankʼs governor‚ Reeves highlighted that climate crisis needs immediate attention: its now considered vital to the committees main goals
The climate and nature crisis is the greatest long-term global challenge that we face
Former Bank governor Lord Mervyn King doesnt support this direction - he told media last year that BoE cant do anything about climate change. The opposition isnt happy either; Gareth Davies shadow financial secretary thinks this will make it harder for the Bank to control inflation and rates
The chancellors plans include:
- Making UK a global hub for green finance
- Adding climate tests for financial firms
- Creating new sustainable finance rules
- Updating monetary policy to include net-zero goals
The Financial Conduct Authority got similar orders - they must now consider sustainable finance in their work. This whole approach seems different from last years policy when Jeremy Hunt removed climate issues from the Banks duties
