With access to such large holdings of cash, we would expect corporations to disburse an unusually large portion of current cash earnings either through de-leveraging, accelerated dividends, or increased share repurchases. To the extent that any of these firms face financing constraints, the repatriated cash could provide a boost to new fixed investment, R&D projects, or acquisitions.
We should only introduce reductions in capital absorption for ‘green’ investments on the basis of sound evidence of that they carry a reduced risk. Direct incentives intended to speed up the transition to ‘net zero’ should be channelled not through prudential waivers, but through different means, such as taxes and subsidies.