Recommendations Toward the Development of Scenarios for Assessing Nature-Related Economic and Financial Risks
The Network for Greening the Financial System has published technical recommendations to guide central banks and supervisors in developing scenarios for nature-related economic and financial risks.
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 Litigation
Climate litigation is “growing rapidly” and central banks should monitor associated financial risks, says the Network for the Greening of the Financial System.
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.
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. …
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.
Macroprudential Policies for Addressing Climate-related Financial Risks
Given the material and systemic risks posed by climate change, there is a strong case for adjusting macroprudential policies, according to this FSI research. …
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