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Climate QE can finance the energy transition & keep the 1.5C limit alive until COP27

November 26, 2021

Colin Hines has drawn attention to a crucial, but shamefully under-reported argument made at the Glasgow COP by Mia Amor Mottley, the prime minister of Barbados, which is under threat from rising sea levels (EU Observer)

“The central banks of the wealthiest countries engaged in $25 trillion of quantitative easing in the last 13 years. Of that, $9 trillion was spent in the last 18 months to fight the pandemic.

“Had we used that $25 trillion to finance the energy transition we would now be reaching that 1.5 degrees limit that is so vital to us.” 

John Vidal, the Guardian’s veteran environmental correspondent, also made the same point in his analysis of the shortfalls of COP26, stating that within a few weeks trillions of QE were found by the rich world to tackle the banking and Covid crisis and asking why it can’t be used for the climate crisis

It is clear that massive upfront money is URGENTLY required to respond to the global climate and nature emergency. The advantage of Climate QE is the speed at which trillions can be made available by central banks printing money, and since it doesn’t need to be paid back to any lenders, it can be invested as grants.

Private and public loans for such areas as the shift to renewables, with a clear financial profit potential, can be covered by those private and public investment sources requiring a return.

In a Guardian letter, Richard Murphy and Colin Hines added that the prime minister of Barbados said “The central banks of the wealthiest countries engaged in $25tn of quantitative easing in the last 13 years. Of that, $9tn was spent in the last 18 months to fight the pandemic.

Some of the Climate QE will allow trillions to be rapidly used to help fund a transition that does not make the majority poorer in the rich countries, enhancing political support for the transformation required. The majority must of course be used for funding the massive mitigation and the transition programme required by poorer countries.

As Hines and Murphy say, civil society which will play a crucial role in keeping 1.5 alive in the run up to the next COP in Egypt, should focus on Mia Amor Mottley’s call for ‘Climate QE’.

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Liddle: no need to tax for social care or the NHS, use government issued bonds

October 19, 2021

Painting 4 by Gordon Liddle, https://pictorignotus.com/about.html 

An extract from Gordon Liddle’s latest six page blast.

Don’t forget, the government is not just taxing the poor with these new NI taxes (10% rise), it is gaslighting us as well. There was no need to tax at all for social care, nor for funding the NHS.

It could easily order the Bank of England to buy some government issued bonds. The debt is rolled on and sometime in the future will be cancelled.

But to do this, it would undermine the absolute message that we can’t ‘afford’ the public services that we need.

There are a lot of rich people who control the politicians and the government with the argument that there is no ‘Magic Money Tree!’ 

This debt narrative is why we are having this NI increase of ten percent now. It is criminally and consciously cruel on those most in need and will for instance, instantly give nurses, and health care ‘essential’ workers a pay cut.

The real purpose of this chance is to ring fence the wealthy and allow them to pass on their inheritance to their children.

In essence, it, as Richard Murphy has pointed out, transfers money from the poor to the wealthy.

This should be an open goal for Labour, but Sir Rodney Woodentop is too busy purging socialists and left-wing Jews out of the Party.

During this zombie apocalypse, the rich have seen their wealth grow by 35% whist foodbank usage has risen 33%.

This latest poll tax is just another insult to ordinary workers.

The Unions should be calling for a general strike, but I suppose we will just roll over and remember when we were affronted when a politician called for communist broadband during the election.’ Maybe we deserve these bastards?

 

Gordon Liddle was born 1956, Horden, County Durham, United Kingdom. Married, lives and works at his Derbyshire studio. BA Hons, Sheffield Psalter Lane Art College Gordon has had numerous positions and travelled extensively through the Middle East, Saudi Arabia, Dubai, Yemen, Lebanon, Bahrain, Africa and Europe, with particular interests in religion, democracy, politics, economics, MMT, and culture. Read more on his website.

 

 

 

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Dodge mass extinction: combine Carbon QE with regulation and taxation to channel private capital into survival-oriented projects

September 11, 2021

Kim Stanley Robinson’s long FT Weekend Essay, ‘A climate plan for a world in flames’, opens by recalling that a few weeks ago, he and his wife drove across the US east to west. In Wyoming, they hit a pall of wildfire smoke so thick that they couldn’t see the mountains just a few miles away on each side of the road. It went on like that for 1,000 miles.

The following notes from one section of the essay will be of particular interest to those on this website’s mailing list.

He notes that we declared peace with the biosphere at the 2015 Paris agreement. In effect we agreed to decarbonise our civilisation across the board: in energy generation, transport, construction — everything.

But since all these activities were run largely by the burning of fossil fuels, this change is a stupendous challenge, equivalent to the mobilisations made in the 20th century to fight world wars. He considers the funding of decarbonising.

It is not true that leaving finance to the market will arrange everything well

The market systemically misprices things by way of improper discounting of the future, false externalities and many other predatory miscalculations, which have led to gross inequality and biosphere destruction. And yet right now it’s the way of the world, the law of the land, the market requirement: capital invests in the highest rate of return.

Pulling thousands of billions of tons of compressed & cooled carbon dioxide (dry ice) out of the atmosphere is simply a cost — the cost of survival, but not the highest rate of return.

So private capital will not invest in it, and if we allow that judgment to stand, we are cooked

In a nation-state system, the money we trust is money that is nationally backed. The richer the country, the more we trust its money. Fiat currency – backed by a country’s government – is what we’ll need to deal with the existential emergency that climate change represents.

We are soon going to be testing out how many trillions of dollars our central banks can create per year without altering people’s trust in money.

Carbon quantitative easing

This will be an experiment, an improvisation. The quantitative easings of 2008-11 and 2020-21 gave strong evidence that a large amount of new money can be created every year without negative results.

The idea of spending newly created money first on decarbonisation and other biosphere-friendly activities is being called carbon quantitative easing – something many central banks are now investigating.

Carbon quantitative easing won’t be enough to do all that is needed but, combined with regulation and taxation channelling private capital into useful, survival-oriented projects, Kim Stanley Robinson thinks we might ‘squeak through’.

Full employment is very much implied in all this; there’s so much work to be done. He gives a few examples:

“We’ll need to re-establish wild land to maintain biodiversity, as in the various “30×30” plans; we may start growing food in vats from micro-organisms, freeing up land for other purposes; we’ll have to green our cities; we have to replace much of our infrastructure; and so on. All this implies a stupendous amount of work, all of which will have to be paid for”. And asks:

“Can we leverage all that needed work toward climate equity between nations and to the lessening of the grotesque inequality between rich and poor? It seems like we could”. He ends:

The time has come to admit that we need to control our economy for the common good. Even in our current political economy . . . we might be able to pay ourselves to do the necessary things and dodge the coming mass extinction event

Kim Stanley Robinson will be speaking at the UN’s COP26 climate change conference in Glasgow in November

 

 

 

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Austin Mitchell – a life well lived: a little-known perspective

August 31, 2021

The late Austin Mitchell’s support and work was greatly appreciated by many, including the Bromsgrove Group and others on the Attwood Group’s mailing list.

Austin Mitchell on an Army Assault Course for the ‘Calendar’TV Programme, 1974 

Birmingham’s Stirrer, edited by Adrian Goldberg, reported that:

In the Commons earlier this month, MPs and other people interested in the financial system celebrated Austin’s reception of the 2008 Attwood Award for this work. From the archives: 2008 Attwood Award | Thomas Attwood

Does the supply of money have to rely on interest rates set by the Bank of England? Not according to Austin Mitchell who – in the tradition of great Birmingham MP Thomas Attwood – wants to see money issued, interest free, for public works.

Parliament’s taboo on answering questions about the monetary system and the Bank of England – stonewalled with a standard phrase “That is a matter for the Bank of England” – has been breached by MP Austin Mitchell using an indirect approach.

 

Receiving the 2008 Attwood award from Angela Shaw, a descendant of the Attwood family

In a 2014 blog: Ben Bernanke, Martin Wolf and Austin Mitchell MP | Thomas Attwood, which referred to ‘helicopter money’: “2008 Attwood Award winner MP Austin Mitchell had wiser proposals. His early day motions on the subject urge government to spend public money on meeting unfulfilled public needs: financing hospitals and investment in environmental technology which will reduce greenhouse gas emissions”.

His friend Bryan Gould, who returned to New Zealand to be a university vice-chancellor – the best Labour Prime Minister Britain never had.

Mitchell was influenced in many of his views by four years spent lecturing in New Zealand, A close Westminster ally was the Kiwi MP and economist Bryan Gould who argued for change: “Why not challenge the virtual monopoly we have allowed the private banks to exercise over the creation of credit? Why shouldn’t a socially aware and economically responsible government create credit where appropriate to ensure that investment is made .  .  . ?”

Mitchell wrote authoritatively, and readably, about economics. During the 1987 election he briefly became a spokesman in Bryan Gould’s trade and industry team. In 1992 he backed Gould for the leadership against John Smith, rating Gould’s subsequent decision to return to New Zealand “a disaster for the Party”. He accused Blair and Brown of being afraid to propose any economic policy “for fear of frightening the City, Europe or the media”.

In his letter to Kevin Donnelly: 30.12.93, Austin said: “As Bryan Gould wrote, we are extremely foolish to have allowed the banks a virtual control over the creation of credit. He advocated a policy of government intervention, exercising some control over the creation of credit for the financing of wealth production in the general interest”.

Early Day Motions

In 2013 Austin Mitchell broke the political taboo on the subject of monetary reform with his Early Day Motion 1515. It urged the Government to redress the balance back to the people by instructing the Bank of England to create credit to be used exclusively to finance necessary public investment in schools, hospitals, transport, police, social services and defence … and to ensure that the heavy extra costs of financing public projects by the Public Finance Initiative or Public Private Partnerships is massively reduced, while enabling more public sector investment to be embarked on to stimulate employment and economic growth … more EDMs followed.

In his series of Early Day Motions, Austin Mitchell recommended a return to the practice of increasing the supply of public money – M0, which is issued interest free every year by the government – to meet public needs such as the building of schools, hospitals, renewable energy technology and public transport, without going into debt. They were signed over the years by 70 or so MPs from five parties and none, including West Midland MPs Lynne Jones, Roger Godsiff and Dr Richard Taylor. A 2013 blog described Admirable politician Austin Mitchell: in the Spirit of ‘45 | Thomas Attwood.

Austin wrote the Foreword to‎ Fantopian Perspective (Apple Books) written by the Bromsgrove Group’s convenor, the late James Gibb Stuart:

Whether we live in Fantopia, Scotland or elsewhere, we’re all bamboozled by bankers. They’ve found an infallible way of robbing all of us of the seigniorage that belongs to the People and of the power of the People’s credit. In return they’ve shackled us with chains of debt.

The power of the people’s credit should be used to ensure that whatever is socially desirable and physically possible is also financially possible, and the kind of understanding that James Gibb Stuart brings can help us to see this, and should dissipate the lack of self-confidence which has prevented us acting to take power from the merchants of debt. Enjoy your Fantopian holiday. But learn from it.

This was entered on this website – followed by the news. “Austin has just had heart surgery and we wish him a full recovery”. The last words come from one of a range of obituaries.

Michael Brown, Conservative MP for Brigg and Scunthorpe and Brigg and Cleethorpes 1979-1997, said: “I was very sad to learn of the death of my dear friend, Austin Mitchell, who was my next door MP for Great Grimsby throughout my time as a Conservative MP. Although we came from opposite sides of the House of Commons I counted Austin as one of my closest colleagues in Parliament. He was one of the finest debaters in the Commons and was highly respected across the political spectrum”.

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A reader asked what Austin had achieved. This was the reply:

Took the lid off the monetary system before QE when the establishment was in strong denial.

Did his best for Grimsby fishermen

Mitchell supported the introduction of television cameras to the House of Commons, raising it for discussion in 1983.[17] The move opened the proceedings of the House to the wider public, who previously had only been able to follow via newspapers and, from 1978, radio. In 1986, following the John Stalker inquiry to alleged Royal Ulster Constabulary “shoot-to-kill” policies in Northern Ireland, a policeman Chief Inspector Brian Woollard claimed he had been removed from the inquiry by a group of Freemasons; Mitchell backed Woollard and argued that there should be a national register of all people in authority who are Freemasons.[18]

Beginning in the 1990s, Mitchell helped to highlight Jersey’s role in facilitating tax evasion, drug trafficking, and money laundering, as well as the island’s secretive partnership with accountancy firms Price Waterhouse and Ernst & Young to enact LLP legislation to minimise accountants’ liabilities.[19][20]

Mitchell was also a keen supporter of the Additional Member System, (the electoral system used in elections to the Scottish Parliament and Welsh Assembly), and called a Private Members’ Debate on this issue on 1 December 2009.[33]

 

 

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Creating money to put our climate house in order

August 16, 2021

When Britain slipped into economic crisis in l815 MP Thomas Attwood (right) called for intervention in the market place by the creation of “money” through the sale of exchequer bills*. He would have listened with interest to the ideas of Colin Hines, Convener of the UK Green New Deal Group.

Writing in the Financial Times (paywall) this week, Hines notes that much has been made of the need for international funding for the transformations required to address climate change.

He urges the British government to lead by example and announce two funding mechanisms to put its own climate house in order, showing that it is serious about making the COP26 conference a success.

As a first step, the government should introduce a third massive tranche of quantitative easing to add to its existing £900bn government money creation programme, which was used during the 2008/09 crisis to support the banks and again during the Covid crisis to support workers and businesses.

‘Green QE’ would use government-created money to invest directly in public and private sector projects that can deliver adequate social provision and also tackle the climate crisis.

At the same time, people’s savings could also have a pivotal role

Chancellor Rishi Sunak has promised to launch a “green bond” this summer and, were savers to be adequately incentivised, it has been shown how this could finance the Green New Deal.

In addition, Sunak could announce a Green Recovery ISA, enabling usually older savers to fund green jobs in every constituency.

* Thomas Attwood: the biography of a radical by David J. Moss, McGill-Queens University Press, 1990

 

 

 

 

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Campaign for a Clean Scottish Currency (CCSC)

July 20, 2021

Political independence without economic independence is not realistic

A Scottish reader has drawn attention to an article by Andy Anderson, the author of A Clean Currency for a Prosperous Scotland.

Since 2014 Andy Anderson (profile here) has seen a dramatic change in the awareness of people in the Yes Movement about the importance of currency. There are now a large number of economists and economic groups calling for a Scottish currency and a Scottish central bank to be set-up right away on independence.

More importantly, he adds, the Scottish public want this now. We know that because the only opinion poll which ever asked this question was run by former MSP James Kelly last November with very interesting results. 59% of those polled said they supported Scotland having its own central bank and its own currency. Even 50% of labour voters supported this. James explained that the question in the new poll explained that the purpose of a new currency is to enable Scotland to control its own monetary policy and interest rates (read more here).

Andy Anderson (right) reflects that a nation’s real “wealth” is not its money or its “currency” but its skilled labour and its natural resources. This is where wealth comes from. He concludes:

So, if we have those things we can make any fiat currency we like from paper. . . Such currency, if made legal tender by a sovereign state, will have a high “exchange value”.

The important question is: Does Scotland have the necessary labour and resources to give ‘exchange value’ to that printed paper money? 

If Scotland does have these resources, and we know it does, then any currency Scotland prints and makes legal tender will have high “exchange value”, and those who get their hands on it will be able to exchange it for valuable goods and services.

A currency for Scotland would be used, like tiny Iceland uses its currency, as a domestic currency only. Unlike the pound sterling, it would not be used for international exchange. Scotland, with its own domestic currency, could easily use other currencies for international exchange. This would be no problem for Scotland provided it kept its exports and imports in balance, because it would have no National Debt (information on exports in this video).

A Scottish Currency Group (SCG) has been formed, including other groups wanting currency and banking reform, based on the 3 principles (a) that we have our own currency. (b) we have our own central bank.(c) that this is set up after the referendum without delay, we have the basis of a united position in the campaign.

We are to establish a joint research unit to examine these issues which will be able to take on board the different views from ourselves, Commonweal, MMT, PM, Scottish Business Group, individual economists, indeed all who have a view on this which they would like considered.

After the referendum when the decisions on these issues are required to be made by the Scottish parliament, this research group will issue a report which will satisfy 99% of the electorate who will want to learn about the main issues.

For more information go to www.andersonpublications.co.uk  and look at this informative currency video which explains in layman’s terms how a new Scottish currency would work. It is based on the currency book by Andy Anderson and Ronnie Morrison called “Moving On” Andy’s latest book “A Clean Currency for a Prosperous Scotland” is also included.

 

 

 

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Bill Clarke: a regular at Bromsgrove Group meetings

July 2, 2021

Since returning from Australia twenty years ago the late Bill Clarke led an increasingly low carbon life in Hall Green – long before there were thoughts of ‘net zero’ – and obviously thrived on his frugal lifestyle.

Well before most even thought of doing so, he was recycling much of the minimum amount of water he used, reducing electricity consumed and recycling paper, glass, and aluminium. He remembers getting the first large low energy light bulb, then costing a punitive £14. Bill walked and cycled, using public transport for long journeys.

He then began to grow fruit and vegetables, using water collected in butts, compost from his bins and wormery and comfrey-based liquid manure.

Bill pointed out that the burning of fossil fuels to make electricity is the single greatest cause of climate change in our country today, and biggest positive contribution you can make is also the easiest.

He tried to persuade members of the West Midlands New Economics Group to change to Ecotricity, the world’s first renewable energy company & largest alternative electricity supplier in Europe, because this company takes the money their customers spend on electricity and invests it in clean forms of power like wind energy. At the time, they were the only green electricity company actually building these new renewable energy sources and had 13 wind parks operating with 13 more at the planning stage.

Bill regularly patrolled his immediate neighbourhood, picking up the litter dropped on pavements and verges. Many began to recognise him and appreciate what he was doing.

He was also in advance of mainstream thinking on the monetary system and attended the annual Bromsgrove Group meetings. James Gibb Stuart, Convener for the Bromsgrove Group, explains here:

Bromsgrove takes its name from the locality in which the Group meets. Its inspiration came originally from Barbara Panvel, of Birmingham and Mumbai, India, who convened the first conference single-handed. She brought together a broad spectrum of social, religious and environmental opinion which quickly realised that money reform is an essential
pre-requisite of reforms and improvements elsewhere . . .

“(T)he most important money reform point to get across to the public . . . is that the State, through some properly constituted State Authority, must revive the power of money-creation on behalf of the People, who presently suffer much in stress and taxation through what is otherwise a private monopoly”.

Above is a photograph taken in 1998. Bill is 4th from left in the front row, with WMNEG’s Malcolm Currie at the back. Some readers will also recognise Dr Naseem from the Central Mosque, Sr Dorothy Peart, from Balsall Heath and Molly Scott Cato, who later became a Green MEP.

He often spoke of the possibility of the state creation of money, to be used for good purposes. This mechanism is now accepted, under the term ‘quantitative easing’ but has been used to benefit bankers, stockbrokers etc, instead of meeting social and environmental needs.

Some time after the death of his wife, Vi, he returned to Australia, where his son, daughter and grandchildren live. We end with a message written by Bill in 2013:

I have a one-bedroom unit (flat) on the ground floor at the end of a double storey block with a back verandah and garden that has sun all day. It’s called Live Alone and I am completely independent. I do my own cooking, housework and shopping. There are umpteen facilities in the retirement village but I only use the gym, to ride an exercise bike, the cafe to socialize and the library. I was in the book club and poetry group but had to drop them because they clashed with the days when I go to a couple of clubs which organise trips and visits to day centres. I also see friends and family regularly so life is pretty full. 

 

 

 

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Schäuble & Van Lerven: prioritise reducing public debt or social, economic and environmental outcomes?

June 24, 2021

Wolfgang Schäuble (below right), president of the Bundestag and a former German finance minister, has stated that public borrowing creates risks for the social fabric – for social peace:

Most lenders to states are central banks, commercial banks, non-banking financial institutions and wealthy individuals; Schauble comments that public borrowing increases their wealth, widening the gulf between rich and poor.

He continues: “The gap between “haves” and “have-nots” poses a huge threat to social cohesion. We must therefore return to monetary and fiscal normality. The burden of public debt must be reduced”.

The uninformed writer , searching for enlightenment, reads that that “On average, through the economic cycle, most governments have tended to run budget deficits, as can be seen from the large debt balances accumulated by governments across the world ”.

 

There is also a world list of countries’ public debt based on data from the Central Intelligence Agency‘s World Factbook and the International Monetary Fund.. 

Over a hundred people from a wide range of disciplines have written to the Financial Times. The lead author, Frank van Lerven (right), who has a distinguished record in African development studies, disagrees with Schauble.

The writers believe that the social fabric of Europe cannot endure a return to “fiscal as usual” — the failed austerity policies of the past that transformed the 2008 financial shock into a prolonged recession. Their message – with which Thomas Attwood would have agreed – is:

“Instead of fetishising fiscal discipline, we should prioritise more important social, economic and environmental outcomes — like creating well-paid green jobs, lifting millions out of poverty and implementing green infrastructure projects. We need a new approach to fiscal policy, starting with a recognition that too little deficit spending can cause irreversible social, economic and environmental damage”.

 

 

 

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QE for bankers feels good, will QE outside the financial complex be inflationary?

May 13, 2021

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Liam Halligan, a journalist/old school economist, who frequently contributes to the Centre for Competitive Advantage in the Global Economy, appears to deplore post-pandemic QE ending up in the bank accounts of firms and households via furloughing and government business support schemes in his article: new QE variant conceals inflation menace.

He admits that there is – as yet – no sign of the rampant inflation he anticipates.

(As most reader will know, by quantitative easing we mean the process whereby central banks inject digital money directly into the economy)

Halligan explains that pre-pandemic QE – which followed the Lehman collapse – remained largely within the banking system and so pre-pandemic QE was a closed-circuit asset swap. It started as a way of covertly recapitalising distressed banks – and was extended over the ensuing decade as it kept asset prices high, which made financiers feel good, putting downward pressure on government borrowing costs.

Richard Evans, a journalist with particular expertise in investment and pensions, writes: “this time the new money may not be confined to the financial system but may be spent on ordinary goods or workers’ wages. That could certainly stoke inflation as measured by the familiar indices . . . Then there is all the money that has built up in the bank accounts of some people at least during the pandemic as they held on to their jobs but spent nothing on commuting, holidays and eating out.

When lockdown ends that money could all be spent in a hurry just as businesses try to get back to full speed. A lot of demand chasing constrained supply is a recipe for inflation”. He believes there is a distinct chance of a jump in inflation if, simultaneously:

  • the Bank of England decides to redirect its newly minted money into the real economy,
  • the Government continues to spend copiously
  • and ordinary people decide to live it up a little after months stuck in their homes.

Halligan continues:

“More specifically, as Britain emerges from lockdown, a wall of pent-up demand is set to burst upon an economy, parts of which, deeply damaged by months of dislocation and closure, will struggle to respond. For all these reasons, I worry inflation could soon surge.

“Post-pandemic QE is on a much bigger scale – expanding more over the last year than during the previous ten. And it’s feeding directly into “broad money” ­– boosting spending power outside the banking and financial complex. As such, in both scale and direction, this new QE variant is much more inflationary”.

Halligan asks: “Who knows what borrowing costs will be once QE is withdrawn? Or are we to have QE-infinity? In the absence of any other explanation, we must assume so. For that’s the logic of what the Chancellor and Bank of England Governor are saying – or, more accurately, failing to say”.

Banking on the community, investing locally for resilience

April 20, 2021

The potential for community-focussed banking to help to reorient the Irish economy in a healthier direction was explored.

The writer mentioned the work of Ellen Brown (USA public banking), a contact of long-standing, and it was good to hear from Caroline that Seamus Maye, one of the speakers at the event, is very familiar with Ellen Brown’s work.

The withdrawal of Ulster Bank and the recently announced closure of 88 branches of the Bank of Ireland has added to a sense of uncertainty in the Irish financial sector. The COVID pandemic, a loss of confidence stemming from commercial bank scandals over the past few years, the lingering effects of the 2008 financial crash, and the many pressing social concerns we are facing – including the housing shortage, rural depopulation and unemployment – are all sources of concern.

And looming in the background are the environmental crisis and (related) resource depletion, exposing the sector to risks which, while hidden to many, are nonetheless alarming.

Continues here: News from Caroline Whyte | New Era Network (wordpress.com)