chief economist of the Slovakian central bank in conversation with @BJMbraun:
'there is nothing progressive about dismantling central bank independence and subjecting it to the will of the people' #nextgencentralbanking
reminded me of famous Mervyn King quote:
'central banks are often accused of being obsessed with inflation. This is untrue. If they are obsessed with anything, it is with fiscal policy'
Luis Garicano (EP): if @Isabel_Schnabel arguments wins the day and @ecb corrects market mispricing of climate risk, what next?
should ECB correct housing market imperfections? social/poverty imperfections?
In EP - we agree w @Isabel_Schnabel that we have a climate risks problem in finance, but we worry about the slippery slope
ie. the liberals in European Parliament are ready to sacrifice climate finance fight on the altar of central bank independence.
the challenge, @lugaricano argues, is that @ecb is the most powerful institution in Europe, it can make or break countries (think Ireland), so we need to negotiate and discuss its climate agenda carefully.
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#WallStreetConsensus & its failure to mobilise trillions in @FT
4 things missing:
a) hegemonic dominance of 'mobilising private finance' in development/climate
b) asking why hegemony
c) mushrooming scaling up initiatives
d) do we want success?
a) Mobilising private finance remains global game - (Bridgetown, Biodiversity COP16, 4th Financing for Development conf) & national game (UK Labour gov, Brazil/Colombia/Chile decarbonisation).
*The world's most powerful political narrative that doesnt deliver
b) hegemonic not (just) because Big Finance is powerful, but postneoliberal, transformative state cant get rid of neoliberal macro - independent central bank dominating fiscal.
without macroinstitutional change- How do we pay for transformation- only one answer: private finance
when Big Finance occupies the state and takes over the social contract, nurses struggle, grandparents struggle, parents struggle, renters struggle, private equity flourishes.
no punches pulled on the Commission's Net Zero Industrial Act, the 2022 attempt to respond to Biden's Inflation Reduction Act with a lot of derisking talk but no money (ahem, European Sovereignty Fund)
Climate policy is industrial policy, and the other way around.
An important reminder that EU's climate policy was once ambitious, state-driven decarbonisation.
the Clean Energy Finance Authority would subsidize foreign demand for US cleantech - or derisk BlackRock renewable assets in say, Kenya with subsidies/guarantees.
nothing in this proposal from a top Kamala Harris advisor suggests US should enable technology transfers to countries wishing to pursue their own domestic cleantech capabilities.
in #WallStreetConsensus, Global South are consumers of American cleantech, with American dollars.
Two amazing Global South progressives and a Nobel prize winner walk into an Oxfam panel on post-neoliberalism
Stiglitz: w neoliberalism, the growth of financial markets changed the political game tremendously
Lula 's special advisor @AAbdenur - clear mismatch - Global North openly exposing industrial policy but pushing IMF/World Bank to continue with austerity and partnerships for hyper-financialisation
missing from this @FT account of the rapid rise of infrastructure as an asset class is the sustained effort that G20 governments have put into derisking infrastructure assets for institutional capital - this is the derisking state in action #WallStreetConsensus
@FT with @BJMbraun we've termed this a weak derisking macrofinancial regime - a set of policies (as in the G20 Infrastructure as an Asset Class agenda, or World Bank Maximising Finance for Development) that seeks to mobilise private capital into infrastructure osf.io/preprints/soca…
BlackRock 's recent acquisition of GIP is a bet that governments - under ideological or real constraints on fiscal space - will not pursue public infrastrucuture projects but instead continue to derisk private capital