'Green QE’ is possible – says the governor of the Bank of England.

Blogger Ref Link http://www.p2pfoundation.net/Transfinancial_Economics

by Anne Henow, 19th March 2014
In response to a letter from MP Caroline Lucas, Bank of England governor Mark Carney hinted in the Financial times today that the Bank of England could potentially invest in a programme of ‘Green Quantitative Easing’.
The idea of ‘Green QE’ is that the Bank of England would – with the agreement of the government – buy bonds from e.g. the Green Investment Bank, which could then use the financing to subsidise low carbon projects.
With this move Carney confirms that the “Green New Deal” is technically possible. Caroline Lucas MP and members of the Green New Deal Group (including PRIME director Ann Pettifor) made ‘Green QE’ part of a larger set of policy recommendations for tackling the triple crunch of the financial crisis, climate change and insecure energy supplies.
Ann Pettifor in her post below, argues that the Ukraine crisis demonstrates how much Britain’s security is   vulnerable to political as well as economic risks beyond its control.
‘Green QE’ would help finance a programme of clean energy self-sufficiency and efficiency, reducing energy costs, and providing households and firms with more security. Additionally, alternative sources of energy could help reduce Britain’s carbon emissions. The outcome of this environmentally friendly investment would lead to the creation of local, skilled, and higher-paid jobs. Those jobs are desperately needed in a country where job growth does not translate into higher standards of living.
Ms Lucas is cited by the Financial Times as saying that ‘Green QE’ could additionally be used “to help make the country more resilient to flooding, and reduce the threat of climate change.”
Globally, the green bond market is growing. According to Climate Bonds, more than $4bn of labelled “green bonds” have been issued in 2014. The European Investment Bank for example issued a 25-year Green Samuri bond and tapped its 2013 six-year Climate Awareness Bond for another €250bn.
The technical feasibility of ‘Green QE’ has now been clarified at the highest level. Now it´s a question of mobilising political will.


Source Ref

Green Party passed a motion to place money creation into public hands and end fractional reserve banking

Home » Blog » 2013 » September » 17 » Green Party passed…Ref Positive Money


Blogger Ref Link  http://www.p2pfoundation.net/Transfinancial_Economics

 

Written by Daniel Key (Guest Author)  

 

 

This weekend (Sept 13-16), the Green Party of England and Wales made history by joining the US Green Party in calling for an end to the private creation of money by banks. After a debate on the motion at the Autumn Conference in Brighton, the Green Party has collectively decided to instead place this power with a democratically accountable National Monetary Authority at the Bank of England. This represents a huge change in Green Party policy, as we are now calling for full reserve banking, alongside other radical policies such as a citizens income, land value tax and of course the decarbonisation of the entire economy as we move to a post carbon world.

The passing of the Monetary and Banking Reform Composite Motion (read the background paper here) follows many years of campaigning within the party by members concerned about the private creation of money. A group of these campaigners, joined under the banner of the Green Party Monetary Reform Working Group, have been tirelessly working to educate and raise awareness about the private creation of money. This has involved the passing of motions to recognise this, regular stalls at conference to distribute leaflets, and of course talking with other members about all the issues that Positive Money also campaigns on.
Despite the former leader and first Green MP, Caroline Lucas, supporting the Positive Money campaign, it was a difficult debate. A wrecking amendment had been submitted, calling for the full reserve banking motion to be deleted and replaced with a motion calling for the public control of banks (which is already Green Party policy). Without ending the debt-based fractional reserve banking system, we can never move away from an economic system that has inequality and unsustainable growth built into it. Thankfully the wrecking amendment fell and the motion was passed unchanged.
However, just like Brighton represents a beachhead for the Green Party, so too does this motion represent merely a foothold for supporters of full reserve banking within the party. I can understand that many members of the public are disillusioned with party politics and keen to stay outside of it. But the Green Party conference is unique in UK politics in that all the party’s policies are debated and passed there by a democratic vote by members. There is still the chance that what was achieved in Brighton could be undone. So I would implore anyone reading this, who is committed to environmental and social justice, and who seriously wants to end the debt-based money system, to join the Green Party today by clicking on this link. Yearly membership is as cheap as £5 a year for students, and £10.50 for anyone not working full-time. If you do join, and support monetary reform, then please email me at dan_ol_key@yahoo.co.uk to continue to campaign within the party and build support for these policies.
This is a historic week for the Green Party. I hope that soon other political parties will follow suit, and we will soon end the crazy banking system we have to put up with today.

Read the Banking Reform Motion 
Read the Background Paper to the Banking Reform Motion

The best use of £50bn QE? Bypass the banks and go direct to green projects

 

Quantitative easing simply hasn't worked, as shown by the fall in lending. The Bank of England should allocate the money itself

• Richard Werner and Caroline Lucas
• guardian.co.uk, Friday 10 February 2012 11.30 GMT
• Jump to comments (135)

In 2009, the Bank of England explained that QE was aimed at "putting more money into our economy to boost spending". Photograph: Peter Macdiarmid/Getty Images

As the Bank of England today decides to introduce a further £50bn into its programme of quantitative easing (QE), it's hard to see why it should be any more successful than the eye-watering £275bn it has already created, which has failed to reach small businesses or create jobs. Yet things could have been very different.

In 2009, the Bank of England explained that QE aims at "putting more money into our economy to boost spending", while relying on the banking system to put the money to work. It said: "Banks end up with more reserves as well as the money deposited with them. Increased reserves mean banks can increase their lending to households and businesses, making it easier to finance spending."

But banks are not increasing their lending. So-called M4 Lending (the Bank's broadest measure of lending to the private sector) contracted by between 3% and 4% on a year-on-year basis in the last quarter of 2011 – the worst performance on record. Bank lending to small- and medium-sized enterprises has contracted most, and the economy is moving into a double-dip. Neither QE nor Project Merlin have been successful.

There is a reason for the otherwise puzzling central bank focus on handing the new QE money to dysfunctional banks: central banks only create 3% of the money supply. Normally, 97% is created by banks through their extension of bank credit. If you wonder how this works: banks simply pretend that borrowers have deposited the money that they lend them, and thus create it out of nothing when they credit their deposit accounts, adding to the money supply. The central banks' focus on entrusting banks to expand the money supply is standard practice. But it hardly makes sense at a time when the very problem is stagnating bank credit. And longer term, we need to challenge the virtual monopoly we have allowed the private sector banks to exercise over the creation of credit.
Measures to increase bank credit need to be stepped up. But in the meantime, the banking system needs to be circumvented. The Bank has a long history of lending directly to the economy, not just to banks or the government. It needs to expand the range of assets and investments it undertakes. For example, it could purchase solar panel installations for the nation, with newly created money. This would be highly productive, hence not inflationary, creating thousands of jobs, reducing electricity bills, and cutting climate emissions. There are many other options, including funding green R&D, nationwide broadband, Bank of England cycle paths in every city – you name it.
Critics are quick to point out that such proposals are not practical, as the Bank wishes to purchase "neutral" government bonds, and not engage in any form of allocation policy. If deemed necessary, any of the green spending programmes above could be arranged via an entity that conducts the investments and owns the rights, and issues equity that is guaranteed against default by the government (at no cost), and purchased by the Bank. But many such schemes create extra costs and bureaucracies, and often also debt and interest burdens. The beauty of the power to create money is that there need not be any debt and interest involved.
Money creation is a public privilege – so using it to benefit the public and the environment seems only right. There needs to be a debate about how QE money is spent. In our view, it should be injected directly into projects that create hundreds of thousands of jobs, and reduce our climate emissions. As for the argument that central banks should not make allocation decisions – it ignores reality. Throughout their history central banks have always made allocation decisions when they purchased private sector assets. The mainstay has been corporate securities, rediscounted by the central bank, based on a list of favoured firms. Even in its definition of QE, the Bank has included the possibility of buying "high-quality debt from private companies".
Direct green investments by the Bank also ensure that Britain will not breach any European laws that forbid government intervention in the economy: central banks are allowed to conduct their monetary policy without restriction.

http://www.guardian.co.uk/commentisfree/2012/feb/10/qe-banks-green-projects




The Blogger Ref Link http://www.p2pfoundation.net/Transfinancial_Economics