Daily Management Review

WSJ: Largest US banks boycott oil and gas sector lending


The largest US banks are boycotting oil and gas sector lending, limiting companies' access to borrowed funds and putting millions of jobs at risk, the Wall Street Journal writes.

The newspaper explains that this is happening under pressure from environmental organizations.

“As a rule, banks compete for lending to corporate clients. Such competition ensures that worthy projects can access capital and use it to provide products to consumers at affordable prices. But Citibank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo started in parallel take action to limit liquidity and capital for America’s energy sector. In particular, these supposedly competitors promised to stop lending in support of Arctic drilling and coal mining,” the newspaper writes.

The publication also recalls that the world's largest investment firm BlackRock, announced in January that it would withdraw from investments in companies that receive more than 25% of their income from thermal coal.

“These announcements are very similar to proposals to conspire over a boycott of a critical segment of the US economy. The Federal Trade Commission claims that such proposals, even if they are ignored, may violate federal antitrust laws,” the newspaper adds.

The publication notes that when the US financial sector restricts the energy sector in obtaining capital, this is not fair competition in the free market. “Boycotting the energy sector by banks is an antitrust issue,” the newspaper notes.

source: wsj.com