W e can already hear the distant thunder of climate change and must not wait for the storm to hit. No, a senior Bank of England official telling banks and insurers that from now on they will be expected to make global warming central to the way they operate. Breeden’s message to the financial sector was that they need to incorporate climate change into their corporate governance, their risk management analysis, their forward planning and their disclosure policies or face the prospect of losing a heck of a lot of money. The financial markets have a term for a sudden drop in assets prices known as a Minsky moment .
Breeden said a climate Minsky moment was possible, in which losses could be as high as $20tn . At this stage, the PRA is content to let firms comply voluntarily but it has the supervisory muscle to get heavy with any organisation that drags its feet if that proves necessary. A paper by Marta Schoch, to be presented at the Royal Economic Society’s annual conference, finds that rising house prices boost support for the Conservatives. Schoch’s research found that a 10% jump in house prices increased the probability of homeowners voting Tory by two percentage points.
The research found, however, that the drift towards the Conservatives was not accompanied by a decrease in support for state ownership of public services.
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