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Published in:
2022 | OriginalPaper | Chapter
6. The Role of Central and Public Banks
Author : Molly Scott Cato
Published in: Sustainable Finance
Publisher: Springer International Publishing
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Abstract
The chapter begins by considering why, in a climate emergency, banks are still investing in fossil fuels, and provides an account of who are the big players in this dirty market. Central Banks have been operating until recently within extremely restricted mandates, largely focused on low inflation and with an eye on unemployment. Growing demands for the sustainability transition to become part of the mandate of central banks were answered for the Bank of England in the budget in March, setting the pace for other countries. This chapter will also cover the issues of carbon stress tests and credit guidance, as well as exploring the role of public development banks such as the German KfW in financing the sustainability transition. It ends with a brief note about the role of the world’s bank, the IMF.