BoE Governor Warns Against Disorderly Shift to Green Energy

The case for financial institutions dedicating more capital to climate risks is yet to be clearly established, the Bank of England (BoE) Governor, Andrew Bailey, said on Tuesday.

Baily warned that disorderly moving away from fossil fuels could disrupt markets and lead to a surge in inflation.

“A disorderly transition, where more severe policies are introduced later in the horizon to compensate, could result in both lower growth and higher inflation from rising energy and materials costs in the economy.”

“Any incorporation of climate change into regulatory capital requirements would need to be grounded in robust data and be designed to support safety and soundness while avoiding unintended consequences.”