Lord Lilley
Main Page: Lord Lilley (Conservative - Life peer)Department Debates - View all Lord Lilley's debates with the HM Treasury
(10 months, 3 weeks ago)
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Baroness Vere of Norbiton (Con)
Of course, my officials and those who work for the independent regulators will look at all evidence, and one often finds that it is very conflicting. The challenges of the models used have been clearly established. There is a higher number of independent transmission channels than previously thought and a lack of historical data; and, of course, one has to anticipate a firm’s reaction to climate change over the longer term. All those things are being considered. This is an evolving science, as I think all noble Lords will agree. However, I go back to the NGFS, of which the Bank of England was a founding member: it consists of 134 central bankers and supervisors from around the world, who are all working together to improve the available scenarios.
Lord Lilley (Con)
My Lords, is my noble friend the Minister aware that the economic chapter of the IPCC report on climate change begins:
“For most economic sectors, the impact of climate change will be small relative to the impacts of other drivers … Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change”?
Why is the Bank of England fussing with this, rather than concentrating on the real problem of avoiding financial crises such as occurred in 2008?
Baroness Vere of Norbiton (Con)
No, I do not quite agree with my noble friend, because the Bank of England has a responsibility to look at all risks. He pointed out many risks that are not climate related. However, underlying all of this is that all those risks—and, indeed, climate risk—are interdependent. One cannot single out one at the expense of others; one has to consider them all in the round. That is why we make it clear when we correspond with the Bank of England and the independent regulators that climate risk is just one of the many risks to our financial system that need to be considered.