Banks being put on notice regarding climate change policies signals change is in the air


Kevin Carmichael: Working with government agencies and the general public could reduce the negative future predicted by Bank of Canada models.

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We have only two weeks left, but it looks like 2022 could be the year Canadian businesses and political leaders come to terms with climate change.

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Too late for the game is not to be appreciated, really, but as the saying goes: The best time to plant a tree was 20 years ago. This is the second best time.

One reason to think that the fluctuations in climate change are about to end is that the bank regulator has put the institutions in charge of them to ensure that they can be trusted to effectively manage the effects of climate change. If they do not, the Office of the Superintendent of Financial Institutions will do this by asking them to save a lot of money in their rain money.

“The goal … is to build disaster management infrastructure,” Ben Gully, assistant director at OSFI, told reporters at a press conference on Jan. 14. and we should have security in its place. “

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He added: “Recently, I am dealing with risks. For a long time, when it is ripe, we will go into the great court. “

In other words, if major financial institutions are able to convince OSFI that they are using the standard anti-risk measures they use on small business loans, they can avoid big business needs. Banks are being given a window to deal with climate change on their targets instead of being regulated by Ottawa. There is every reason to think he has taken it.

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Make no mistake: the cost of money for those who are the worst offenders will rise sharply, and the economic crisis will be physical because those pollutants are Canada’s main economic engine.

The OSFI guidelines for the implementation of the regulatory framework were informed by related research and the Bank of Canada show that there is no hiding place from the effects of climate change. Sample analysis of four possible scenarios for the next 30 years – status quo; lazy response that does not meet climate goals until 2100; late response that needs to be taken to achieve modern goals by 2100; and tightly embracing zero by 2050 – both are confident that industries such as oil and gas will have a hard time making money, and Canada’s economic growth will suffer as a result.

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“This is a reality,” Toni Gravelle, deputy governor of the Bank of Canada, told a news conference. change is growing. “

This review highlights the role that Bank of Canada and OSFI will play in the future climate change. The central bank has little regulatory power, but it is the country’s largest financial research institute, and its function has the promise of non-interference in environmental policy. OSFI, on the other hand, does not have the ability of the central bank to make headlines, but it does have a major influence on Bay Street as a Canadian banking oligopoly banker.

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The two have a chance to be the center of gravity for climate change, as the most important negotiations will start from the signatures of Bank of Canada Governor Tiff Macklem and / or Peter Routledge, OSFI chief executive.

Whether their work on climate change makes a difference will be for all of us. Politics remains confusing. For example, the politicians of the oil industry are often more opposed to change than to the same companies. But the paintings of world political leaders that appear on Twitter every day are very relevant in real life. All major parties approved the carbon tax in the last election, and the Liberals and Conservatives said Canada needed an agency that could fund research into the world’s biggest problems.

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Climate change may be a clear target for such an organization, depending on The story of Robert Asselin and Sean Speer , Policymakers who served the Liberal and Conservative governments, respectively, were published in the Financial Post on Jan. 10. Both are powerful and business and political leaders: Asselin, who worked for former finance minister Bill Morneau and BlackBerry Ltd., is now a head. of policy to the Business Council of Canada, a board of directors; and Speer and a Scotiabank partner at a talented competition at the Public Policy Forum, a think tank with a team of supervisors with governors and senior government officials.

Collaboration with government agencies and parastatals could reduce the predictable future of the Bank of Canada. The central bank based its analysis on modern technology because it is difficult to imitate human intelligence. A technical achievement or two can change what is happening. The forces that are coming together are the ones who will allow this to happen.

• Email: [email protected] | | Twitter: carmichaelkevin

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