Green bonds offer nothing but virtue-pleasing

Would you touch a ‘green gilt’ issued by the government, with an interest rate of just 0.87 per cent? Some people, apparently, would. The Treasury announced yesterday that it had shifted the first £10 billion tranche of ‘green gilts’ to raise finance for projects such as zero-carbon buses, wind farms and other green things. Indeed, the bond – which matures in 2033 – was ten times oversubscribed. The government had already planned to issue a further £5 billion, and might now be encouraged to issue far more. Green gilts are just more government borrowing, rebranded to make lending to the government look virtuous With the government’s preferred measure of inflation,

The EU’s debt bondage expansion

In the global market for government debt, worth an estimated $92 trillion (£66 trillion), it amounts to little more than a drop in the ocean. The European Union this week issued the first €20 billion (£17 billion) of bonds to pay for its Coronavirus Rescue Fund. The money itself doesn’t amount to very much one way or another. And yet, the Commission’s President Ursula von der Leyen was surely right when she described it as a ‘truly historic day’. Why? Because, the Commission is already using it to seize control of fiscal policy, just as it used vaccine procurement to take control of health policy. Its enthusiasts have already hailed the

The South Sea Company’s bonds were never meant to be a scam

In Money for Nothing, Thomas Levenson brings us into the story of the South Sea Bubble by writing about the development of the mathematics of odds and prediction. These advances were the beginnings of actuarial science: an understanding of risk that underpins insurance. We start with Isaac Newton and his role in attempting to stabilise the currency with something we now think of as quite normal: currency revaluation (Levenson’s previous work on Newton means he’s well prepared here). Much of early modern Europe based their currencies on silver, and fluctuations in the value of the metal were a recurring issue. Ongoing wars meant England was massively in debt, and having