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A Green Swan is coming, the bank of banks warns… again

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American ESG Group Staff

May 9, 2022

Don't say he didn't warn. The coordinator of all the central banks of the World, is calling for a sort of mass for the end of the month... one in which people probably won't want to hear what is going to be said.

The assistants? The representatives of banks that generate or print euros, dollars, pesos and the rest of the currencies to distribute them to all the financial groups. To your bank account.

The term used by Agustín Carstens with which he calls the meeting is "Green Swan 2022", Green Swan, a brilliant color used by the general manager of the Bank for International Settlements (BIS) to refer to the greatest challenge that this humanity has that got into in trouble and now awaits the blow of a wave coming from the world change of the new climate.

The root of the event's name comes from The Black Swan, a 2007 book written by former options trader Nassim Nicholas Taleb, which refers to the great impact of the highly improbable. Rare and unpredictable events, such as the current pandemic.

The authors of the document The Green Swan, Central Banking and Financial Stability in the Climate Era, published in 2020 by Patrick Bolton, Morgan Despres, Luiz Awazu Pereira Da Silva, Frédéric Samama and Romain Svartzman, sponsored by the BIS and the Central Bank of France, took their title from there.

A blow is coming. They don't know what dimension yet, but most likely bigger than Covid-19.

Last year, Carstens used the reference to call for the first edition of this warning: "How in practice can the financial sector take immediate action against climate change-related risks?".

It was at that meeting, broadcasted by videoconference, when the central bankers talked about how the impact of climate change is no longer in the future. It's already started and it's only going to speed up.

Remember the burned forests in California, the frozen pipelines in Texas, the German towns devastated by rains or the arrival of tons of sargassum on once-white beaches on the coast of Cancun. All in less than 24 months.

At the 2021 meeting, one of the most respected women in the banking world, Christine Lagarde, issued an alert: bank assets deteriorate, lose value and that represents a systemic risk for financial groups.

Hotels and other assets, such as the energy infrastructure that the banks took as collateral, deteriorate or simply go out of operation in a shorter time, their devaluation accelerates and the backing of the money that people deposited weakens.

Given the circumstance, notice the change in the speech that previously referred to a possible turn to avoid the blow:

“How to adapt the operations of a central bank to a warmer world?”, convenes a panel made up of Fernanda Guardado, from the Central Bank of Brazil; LÜ Zheng, Bank of China; Ivan Odonnat, from the Bank of France; Tokiko Shimizu of the Bank of Japan and James Talbot of the Bank of England.

The members of a round table will publicly discuss the role of finance during the "climate transition" and the European Commission will be represented; Standard Chartered Bank; Deutsche Bank; the London School of Economics and Emmanuel Faber, of the International Sustainability Standards Board, whose presence heralds the possibility of revealing the model under which all listed companies will soon have to report their impact on the environment, society and corporate governance (ESG).

The inevitable Al Gore, former US presidential candidate, will update about what he has warned since the beginning of the 21st century and that has now put the world in a remedial phase.

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