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Bank of England considers legal action over green bonds hoax

·Senior City Correspondent, Yahoo Finance UK
·3-min read
Pedestrians wearing face masks walk past the Bank of England in London, Wednesday, March 11, 2020. Britain's Chancellor of the Exchequer Rishi Sunak will announce the first budget since Britain left the European Union. (AP Photo/Matt Dunham)
Pedestrians wearing face masks walk past the Bank of England in London, Wednesday. Photo: AP Photo/Matt Dunham

The Bank of England has been forced to deny its corporate bond buying programme was going green after being hit by an elaborate hoax.

An unknown person or group issued a fake press release supposedly from the Bank of England on Monday. It claimed the central bank was about to stop buying bonds from oil and gas companies. The statement was emailed to the press, posted on social media, and published on a fake Bank of England website.

The real Bank of England issued a statement denying it was behind the release on Monday afternoon.

“We are aware that a group purporting to be the Bank of England has published fake announcements today through social media and email,” a spokesperson said.

“The Bank has engaged with media organisations which reported on these announcements, which have retracted the false reports. The Bank is also working to remove these false announcements from other websites.”

READ MORE: Bank of England told to 'put its money where its mouth is' on climate change

It was not immediately clear who was behind the hoax. The central bank said it was investigating and would consider legal action.

“The Bank investigates any such mis-use of its name and will consider further legal options to require groups which so mis-use it to cease and desist,” a spokesperson said.

The hoax release claimed the central bank was about to stop buying bonds issued by companies with large carbon footprints, starting with the energy sector. The Bank of England maintains a stock of corporate bonds worth £20bn under its asset purchase facility, better known as quantitative easing. The move was supposedly motivated by a desire to bring the Bank in line with the 2015 Paris Climate Agreement.

The hoax had the potential to send shockwaves through global markets. Central banks have emerged as a major player in financial markets over the last decade and investors watch their official statements closely. Even the slightly change in the wording of statements can send provoke large moves in asset prices.

The highly realistic statement used the same technocratic language favoured by central bankers and was posted on a website that appeared to be an exact clone of the official Bank of England website with a slight change to the URL.

Earlier this year, the Bank of England published the first ever analysis of its carbon footprint. It found the central bank’s current investment portfolio is on a path to contribute to an average global temperature increase of 3.5°C by the end of the century — well above the 2°C warming limit agreed by world leaders at the 2015 UN Paris climate summit.

UK government debt accounts for 98% of the bonds purchased by the Bank of England. The high carbon footprint from the investment portfolio largely reflects the makeup of the UK economy as a whole.

Watch: Why can’t governments just print more money?

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