‘You don’t need to believe in climate change, you don’t need to believe that it is man-made. You just need to believe that governments are going to do stuff and that is going to affect your business. And then it is a material risk'
A sudden repricing of assets as a result of climate change could trigger the next financial crisis, according to a former BoE veteran Getty |
“It is potentially a systemic risk,” Mr Fisher said Monday in an interview in Sydney.
A sudden repricing of assets as a result of climate change “could be the trigger for the next financial crisis,” he added.
Mr Fisher, a 26-year veteran of the UK central bank, pointed to the renewed fall in sterling earlier this month, after the Government set out a timetable for leaving the European Union, as an example of the way that prices can shift suddenly.
“That is exactly the sort of event you might get with climate change,” said Mr Fisher, formerly deputy head of the UK’s Prudential Regulation Authority.
Signs that governments are growing increasingly serious about tackling climate change suggest that businesses need to be ready for greater regulation, Mr Fisher said.
China and the US agreed at the G20 meeting in Hangzhou last month to ratify the Paris accord designed to limit global warming, bringing two of the world’s largest emitters of carbon pollution on board with an agreement to control temperature increases.
A paper presented to the Hangzhou G20 meeting by the UK’s Cambridge Centre for Sustainable Finance urged financial institutions to improve the way they assess climate risks.
“You don’t need to believe in climate change, you don’t need to believe that it is man-made,” Mr Fisher said.
“You just need to believe that governments are going to do stuff and that is going to affect your business. And then it is a material risk.”
Climate change protests around the world. View 25 images
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“Climate change is a genuine investment risk,” Mr Gray said at a Citigroup Inc conference in Sydney last week.
Mr Fisher said there is a possibility of unexpected moves in financial markets as a result of climate change.
He warned of the chance of a: “system-wide repricing of assets happening quite suddenly.”
Copyright Bloomberg
Links
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