Does climate change pose risks to banking?

Financial regulators may be preoccupied with bank liquidity concerns right now, but they’ve also been allocating ever more resources to studying these climate issues. The global banking system is exposed to climate-related risk in three ways: transition risk, reputational risk, and physical risk. Climate stress testing is at a similar stage today as the first macro-focused stress tests were after the 2007/8 global financial crisis, but it’s here to stay. And while the initial results from these tests were good, it’s still too early to celebrate. Read more about climate stress testing and...