Research Archive
Prudential Transition Plans
Prudential transition plans could offer a technical solution to address some of the challenges of integrating transition risks into the prudential framework, say climate finance experts.
Climate-related Systemic Risks and Macroprudential Policy
Macroprudential policy is a ‘natural’ starting point to address systemic climate risks, say economists, and systemic risk buffers and exposure limits are two promising options.
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.
The Effects of Climate Change on the Natural Rate of Interest
This working paper by the ECB says climate change may reduce natural interest, creating serious issues for monetary policymaking. The authors say an orderly transition would mitigate this, and central banks should address carbon biases to meet mandates.
The Macroprudential Challenge of Climate Change
This joint ECB/ESRB report examines how climate shocks can affect the European financial system, identifies transmission channels and amplifiers of climate risk and finds significant threats to European financial stability.
Aligning Finance with the Green Transition
This paper proposes an allocative “green credit policy” approach, whereby incentives and targets are deployed to align the financial sector with governments’ decarbonisation plans.
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