Climate Change: Tempus Fugit

Summary

Last week's United Nations Summit and Climate Week NYC, among other things, have evidenced the widespread consensus on the fact that the impact of global warming and the transition to a low-carbon economy may involve significant risks to financial stability.

Key points

• Key points:
• The Paris Agreement (2015 UN Climate Change Conference) was a tipping point on how to address climate change to breaking the tragedy on the horizon.
• In April, the Central Banks and Supervisors Network for Greening the Financial System and the European Banking Authority, released their plans to integrate climate-related risks sequentially as a source of financial risk into the prudential framework.
• The European Central Bank included climate-related risks for the first time in its banking supervision risk assessment for 2019 and has publicly announced the possibility of incorporating those risks in future stress tests.

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