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The underlying message in that sentence "banks [...] which have lent $400bn" is that we cannot enforce stricter regulation on ships, because it would hurt banks
by sandstrom 10y ago
The underlying message in that sentence "banks [...] which have lent $400bn" is that we cannot enforce stricter regulation on ships, because it would hurt banks that lent the money.
It is also true that banks have so little equity that they easily get insolvent. In the beginning of the nineteenth century banks were around ~30% equity. Nowadays ~1-2%.
- vesinisa 10y agoI read it the point of the sentence was was to illustrate why the banks are unwilling to lend even more for the green tech retrofitting, since the shipping business is troubled and already heavily indebted. The stricter regulations will anyway come in place by 2020-2021. Banks trying to keep risks minimal actually sounds great to me. If you increase the equity, they can take bigger risks, but then again estimating risk is always by definition guesswork and can backfire in disastrous ways (think 2000s subprime crisis).