The Joint Climate Risk Forum of FCA and PRA held its third meeting in November 2019. At the meeting, the working group chairs presented the draft practical guidance, recommendations, and progress to date. The members discussed the outputs, noting the importance of how to strike the right balance around the granularity or "prescriptiveness" of the recommendations and how to consider challenges related to data integrity. The members also discussed the form of the outputs and the timeline for publishing them, with focus on getting wider industry input on the draft guidance and recommendations in early 2020. Members agreed that there would be an industry engagement event in January and the Forum will aim to publish the final version of these outputs in Spring 2020.
The forum agreed to undertake a second year of work and discussed initial ideas for what future work it may undertake beyond Spring 2020. The next meeting will take place in the first quarter of 2020 and will focus on finalizing the outputs for publication and determining the next steps.
The objective of CFRF is to build capacity and share best practices across financial regulators and industry to advance financial-sector responses to the financial risks from climate change. It brings together senior representatives from across the financial sector, including banks, insurers, and asset managers. The forum is chaired by Sarah Breeden (Executive Director of International Banks Supervision, PRA) and Christopher Woolard (Executive Director of Strategy and Competition, FCA). Since its inception in March 2019, CFRF has set up four technical working groups on disclosure, scenario analysis, risk management, and innovation. Each working group is chaired by a CFRF member and supported by an external secretariat. Each working group has planned the approach it proposes to take and the outputs it will deliver in terms of practical guidance and best-practice material.
Keywords: Europe, UK, Banking, Insurance, Securities, Climate Change Risk, Climate Financial Risk Forum, ESG, CFRF, FCA, PRA
Previous ArticleEU Reaches Political Agreement on Sustainable Investment Taxonomy
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.