Financial Regulation International
Financial instability in the Anthropocene: Understanding climate risk and regulatory reactions – Part I
by Alexander C Reay
Instability is a seemingly inherent characteristic of the international financial system (IFS). Over the past 100 years alone
we have regularly seen the system teeter on the brink of collapse as a result of rampant speculation, capital flight and subprime
mortgages. Each crisis has in turn damaged and constricted real economic growth, undermining the prosperity of the public.
As far as human-induced crises go, climate change threatens to be our magnum opus, not least for its financial impacts. For
while the crisis is primarily perceived as an ecological one, in truth it is also of a financial nature. The systemic change
that solving the crisis requires, and that the unavoidable environmental changes will precipitate, will inevitably combine
to create a cocktail of pressures on the IFS. In turn, these pressures threaten to undermine the stability of the IFS, sending
it into yet another crisis, and devastating its ability to effectively allocate resources, risking the potential that we will
be dealing with a dual crisis of climate and finance.
The rest of this document is only available to i-law.com online subscribers.
If you are already a subscriber, click login button.Login