Research Archive

A bee feeding on a purple flower
Research| September 28, 2023

Nature-Related Financial Risks

A Conceptual Framework to Guide Action by Central Banks and Supervisors

The Network for Greening the Financial System has released a conceptual framework for assessing nature related financial risks which provides a “starting point for analysis and action”. …

Written by Network for Greening the Financial System
A person uses a long-handled tool to clean a large solar panel in a srubby desert
Research| September 20, 2023

Prudential Transition Plans

The Great Enabler for Effective Supervision and Regulation of Climate-related Financial Risks?

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.

Written by LSE Grantham Institute
Large ocean waves crashing against a row of houses
Research| September 4, 2023

Climate Change and Sovereign Risk

Climate change creates substantial sovereign credit risks which should be reflected in banks’ capital provisions and central banks’ prudential policy and risk management.

Written by European Central Bank
Bank notes of various currencies laid out flat and overlapping
Research| August 31, 2023

Rising Temperatures, Falling Ratings

The Effect of Climate Change on Sovereign Creditworthiness

Researchers show that climate-induced sovereign downgrades will occur by 2030, and how climate-smart policies could curb the impact on debt-servicing costs.

Written by Management Science
Large ocean waves crashing against a row of houses
Research| August 8, 2023

Crisk: Measuring the Climate Risk Exposure of the Financial System

Economists have developed a market-based measure of the potential effect of transition risk on banks’ capitalisation which can be used to explore ‘severe but plausible’ climate scenarios.

Written by Federal Reserve Bank of New York
A worker in hard hat and fluorescent jackets working on a laptop balanced on a car bonnet. They are looking at a wind turbine in the distance
Research| July 26, 2023

Climate Risk Stress Tests Underestimate Potential Financial Sector Losses

Climate stress tests may significantly underestimate losses and should incorporate “severe but plausible” scenarios such as “green swan” and Minsky-type events, say researchers. …

Written by Centre for Economic Policy Research
Large ocean waves crashing against a row of houses
Research| July 25, 2023

A Common Path to Improve European Climate Risk Stress Testing and Scenarios Analysis

Survey results show banks are gaining valuable insights from climate risk stress tests, but improvements are needed to effectively manage those risks.

Written by Association for Financial Markets in Europe
An oil rig at sea, silouhetted against a setting sun and orange sky
Research| July 10, 2023

Pension Fund Losses Should Not Deter High Income Countries from Bold Climate Action

Losses caused by stranded assets for lower and middle income groups can be compensated at relatively low cost and are not a credible deterrent to bold climate action, say researchers.

Written by Semieniuk et al
A sea turtle seen from above, swimming through clear azure waters
Research| May 23, 2023

Integrating Nature Into Debt Sustainability Analysis

Multilateral financial organisations would be making a “grave omission” if they fail to include biodiversity-related risks in debt sustainability analyses, according to this report. …

Written by Finance for Biodiversity Initiative & SOAS Centre for Sustainable Finance
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
Hand removes blocks with the word Risk
Research| April 11, 2023

Results of the 2022 Climate Risk Stress Test of the Eurosystem Balance Sheet

The European Central Bank’s 2022 stress test finds that the Eurosystem’s balance sheet is materially exposed to climate risks and that the corporate bond portfolio is the primary source of exposure.

Written by European Central Bank

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