CBA in funding warning

A TOP Commonwealth Bank executive has warned that failure to respond to climate change could destabilise the bank by locking it out of competitive funding.

In testy exchanges with maverick LNP representative George Christensen (pictured) and his joint standing committee on trade and investment growth, CBA institutional boss Andrew Hinchliff said there was “absolutely” a risk if the bank did not respond to shifts in global capital.

“So the risk for us is funding and capital dries up, not necessarily instantaneously but over time you’d expect your cost of capital to be affected by that,” Mr Hinchliff said.

Mr Christensen, chairman of the committee, interrogated the institutional bosses of the four major banks on Friday about their policies to exit the “lawful” and “profitable” thermal coal sector by 2030, and whether they were taking instructions from the prudential regulator.

While the banks denied that the Australian Prudential Regulation Authority strongarmed them into avoiding or investing in particular sectors, they said the regulator required robust risk management frameworks and appropriate governance levels.

Mr Hinchliff said an example was APRA’s climate vulnerability assessment, for which an information paper was released on Friday. CBA shares rose 47c to $101.84.