Quickening inflation and a major equities rout are the most credible risks for markets, along with another bout of extended shutdowns related to the pandemic, said Nicholl, who’s also on the steering committee for the OECD’s debt management working party. While these aren’t necessarily likely, “there’s some pretty big faultlines out there,” he said.

Australia is an outlier though, with more and more countries working on sustainable financing plans to tackle climate change. A total of 16 governments had issued green bonds as of end-September, according to the Organisation for Economic Co-operation and Development. Since then Italy has debuted, and the UK, Canada and Ghana have deals in the pipeline.

Green bonds are just a tiny part of the total pool of global assets right now, Nicholl said. At some point it’s possible, though maybe not for years, that these securities “will become a much bigger proportion of the market, in which case we’ll be forced to acknowledge that.”


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