Research Archive

Risk management diagram
Research| May 15, 2023

Macroprudential Policies for Addressing Climate-related Financial Risks

Challenges and Trade-offs

Given the material and systemic risks posed by climate change, there is a strong case for adjusting macroprudential policies, according to this FSI research. …

Written by Financial Stability Institute
Dark storm clouds hang over a tropical sea and coastline
Research| May 4, 2023

Climate Stress Tests

Are Banks Fit for the Green Transition?

Deutsche Bank research highlights the growing pressure on banks to improve their climate risk management and disclosure frameworks, and argues that initial stress tests are “just the beginning”.

Written by SUERF
A man wades through a flooded street in a quaint Cornish town
Research| March 22, 2023

Climate-related Risks and the Regulatory Capital Framework

Gaps in the understanding of climate risks create uncertainty over capital requirements and macroprudential policy. This Bank of England report states that firms and regulators must improve their climate risk management.

Written by Bank of England
Blackened, leafless trees stand surrounded by ash following a wildfire
Research| February 23, 2023

Macroprudential Policies and Climate Risks

This paper argues that macroprudential policy is needed to prevent climate risks becoming systemic risks, and proposes ways to increase the resilience of EU banks.

Written by European Banking Institute
Two men work beneath a ground-mounted solar panel surrounded by brown hills in Afghanistan
Research| October 14, 2022

Greening Capital Requirements

This paper makes the case for differentiated capital requirements as a tool to green the financial system and reduce the buildup of physical environmental risks.

Written by Inspire
A person stands at the edge of a vast open-cast coal mine
Research| October 6, 2022

A Safer Transition for Fossil Banking

Quantifying the Additional Capital Needed to Reflect the Higher Risks of Fossil Fuel Exposures

This report quantifies the additional capital needed to reflect the financial stability risk associated with banks’ fossil fuel exposures.

Written by Finance Watch
A row of digniatires holding hands with their arms raised at the Paris Cop meeting in 2015
Research| September 7, 2022

The ECB Paris Gap: Substantive but Treatable

This report proposes that the European Central Bank align with its primary and environmental mandates by adopting climate neutrality principles and increasing the scope and urgency of its decarbonisation plans.

Written by Greenpeace, SOAS, University of Greenwich, University of the West of England
Smoke pouring from the tops of two tall industrial chinmeys
Research| June 17, 2022

Aligning Financial and Monetary Policies with the Concept of Double Materiality

Rationales, Proposals and Challenges

This paper from six Banque de France authors outlines between organisational risk, systemic risk and post risk rationales for the use of double materiality, suggesting policy implications and challenges for each.

Written by SOAS Centre of Sustainable Finance, LSE Grantham Research Institute on Climate Change and the Environment & Inspire
Worker installing solar panels
Research| May 30, 2022

Capturing Risk Differentials from Climate-related Risks

This Network for Greening the Financial System report examines the case for overhauling central banks’ capital requirements and buffers based on climate considerations. …

Written by Network for Greening the Financial System
A pair of rhinoceros iguanas
Research| May 10, 2022

Developing a Precautionary Approach to Financial Policy

From Climate to Biodiversity

This peer-reviewed policy brief outlines the limitations of a risk-based approach to the radical uncertainty of climate change and biodiversity loss, advocating a precautionary approach and mindset.

Written by Inspire
Dark storm clouds hang over a tropical sea and coastline
Research| April 25, 2022

Realising Central Banks’ Climate Ambitions Through Financial Stability Mandates

Effective green central banking governance should be based on a synthesis between monetary and macroprudential policymaking, finds this study of G20 climate-related policies and mandates.

Written by Paola D’Orazio and Lilit Popoyan

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