Tuesday, May 24, 2022

Central Banks at War against the Weather

So much for speaking truth to power. An HSBC banker tried it the other day, and got suspended. His “case” is currently under review. This goes to show you that cancel culture has migrated from the academy to the executive suite. 

After reviewing the fracas I want to raise a more salient issue. How much damage have bankers, especially central bankers, done to the world economy by shifting their focus away from monetary stability and toward the weather. Apparently, you cannot fight inflation and fight the weather at the same time. Who knew?

The HSBC banker is named Stuart Kirk-- no relation to your humble blogger. 

Here is the story, via the Daily Mail:

HSBC has suspended one of its top bankers over a rant about climate change in which he said 'who cares if Miami is underwater' and 'nutjobs are always warning about the end of world'.

Stuart Kirk, the global head of responsible investing at HSBC Asset Management, made the inflammatory comments during a speech at a conference on Thursday. 

Senior figures at HSBC, one of the biggest banks in the world, have come out to condemn his comments after they sparked a scandal. 

Were Kirk’s comments a surprise? Was he just talking off the cuff and running his mouth, as our president often does? Not at all. The speech was approved by the powers that be at HSBC.

This is despite the title of the presentation — 'Why investors need not worry about climate risk' — being agreed two months in advance and publicised online in the run-up to the event. 

Opening the speech, Mr Kirk said: 'Climate change is not a risk we need to worry about - heresy!'

He continued: 'I feel like it's getting a little bit out of hand, the constant reminder that we are doomed. There's always some nutjob telling me about the end of the world.

'But what bothers me about this one, is the amount of work these people make me do, the amount of regulation coming down the pipes, the number of people in my team and at HSBC dealing with financial risks from climate change.' 

Climate change hysteria is not some innocent affectation. It has infiltrated the inner sanctums of one of the world’s biggest banks, causing employees to waste enormous amounts of time and effort calculating the next decade’s weather.

It is causing them to ignore real problems:

'I work at a bank that's being attacked by crypto. We've got regulators in the US trying to stop us. We've got the China problem. 

'We've got a housing crisis looming. We've got interest rates going up. 

'We've got inflation coming down the pipes and I'm being told to spend time … looking at something that's going to happen in 20 or 30 years. Hence, the proportionality is completely out of whack.' 

He added: 'Human beings have been fantastic at adapting to change, adapting to climate emergencies, and we will continue to do so.

'Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages and that's a really nice place.’

Obviously, people who live in Miami might not be quite as nonplussed as Kirk, though real estate values in the Sunshine State have been doing very well, thank you.

Of course, given the hysterical reaction to Kirk’s words, senior management at HSBC has denounced them. They are investigating Kirk, and working to try to make it all go away. Nothing worse for today’s woke bankers than a good dose of the truth. 

Now, the Wall Street Journal editorializes about the matter this morning. It argues that central bankers have spent too much time worrying about the weather and not enough time working to tame inflation.

One remarks that one Lawrence Summers has castigated the Federal Reserve for being too timid in its efforts to control inflation. Summers did not identify the reason or the cause, but the fact that central bankers have been asleep at the proverbial wheel should be the place to start.

The Journal explained:

But he merely said what many in his industry believe but are too timid to say: Climate change poses a negligible risk to the global economy and bank balance sheets. Oh, and central bankers are partly to blame for the current economic turmoil because they’ve focused too much on climate change while ignoring far greater, more immediate risks such as inflation.

Being as HSBC is a British bank, Kirk identified in particular the comments by a British banking honcho:

“Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong,” one of his slides noted. He highlighted sky-is-falling quotes from banking potentates such as Mark Carney, the former Bank of England Governor, who recently said the damage from climate change will dwarf the current pain from rising prices. Tell that to the working folks dealing with 8% inflation.

Of course, Carney is a former governor. But, we want to know how Britain’s current central bankers have been fighting the good fight against the weather:

Mr. Kirk warned that climate regulation has diverted bank resources from lending. The Bank of England’s climate stress tests (whose results are expected to be released Tuesday) are rigged to make bank balance sheets look less resilient to climate policy changes. This allows regulators to justify more aggressive financial regulation to punish fossil-fuel investment.

If the subject grabs your attention, see also the article by Nicholas Curott and James McClure published by the American Institute of Economic Research. Link here.


Anonymous said...

Has anyone, ANYONE, managed to tame the weather? No one that I've ever heard of. How about you? All you can do is hunker down and hope for the best...and fortify your house.

Anonymous said...

When it comes to "weather", you can swear at it, complain about it, or just put up with it and wear clothes to deal with it.

Anonymous said...

"Mr. Kirk warned that climate regulation has diverted bank resources from lending."
I have to ask, HOW can the Climate be "regulated"? "Inquiring minds want to know, don't you know..."