Bank of England urged to stop accepting fossil fuel assets as collateral for public loans

'Hidden subsidy'

Campaigners have accused the Bank of England of providing a "hidden subsidy" to fossil fuel companies, as they stepped up calls for the central bank to reform the way it lends public money to financiers.

A paper published by campaign group Positive Money this morning (28 February) argued the Bank of England's acceptance of fossil fuel assets as collateral when providing loans to financial firms effectively provides a "hidden subsidy" to coal, oil, and gas companies. The research calculates the Bank has allocated £165bn to banks and other financial firms since 2014 through just one of a number of schemes where it lends public money to banks against collateral, which can include government bonds but also debt issued by corporations. Companies whose bonds are currently accepted by the ba...