Why central banks must now become the saviours of the climate crisis

Analysis: After governments failed to use Cop26 to bring about an ambitious solution to global heating, central banks must use their sway to tackle the issue, writes Phil Thornton

Climate activists protest over fossil-fuel use and inaction during Cop26 in Glasgow (AFP via Getty)

Cometh the crisis, cometh the central bank. Each of the major financial shocks of the past two decades has been met with cuts in interest to close to zero and the release of trillions in quantitative easing (QE).

The sharp impacts of the global financial crisis, the eurozone debacle, the fallout from the Brexit referendum and post-Covid turbulence have all been blunted by monetary policy.

Now the masters of the financial universe will be called upon to become the saviours of the environment as well.