Sunday, December 10, 2023

Beware of green central bankers out to punish Canadian banks that support oil and gas

There is a bit of banking mischief emerging in international regulatory circles that Canadians should pay heed to. The mischief is a misguided attempt by 54 central banks to politicize banking using a group they call the “Network for Greening the Financial System.” The central bank of France is leading the charge.

This loose network of central bankers, which includes the Bank of Canada — and notably does not include the Federal Reserve — is responding to demands for action on climate change. It seeks a global framework to manage climate risk in the financial sector. Many in this group are members of the Basel Committee on Banking Supervision (BCBS), which is currently led by Canada’s Carolyn Rogers, who came to her current role from our Office of the Superintendent of Financial Institutions, Canada’s prudential bank regulator.

The BCBS has been working for more than a decade to devise common risk-management standards across BCBS member jurisdictions (including G7 countries). Its latest efforts along these lines are the Basel III standards that Canada is adopting.

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