Featured Product

    ECB Consults on Guide for Managing Climate and Environmental Risks

    May 20, 2020

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy. The guide also outlines how ECB expects banks to become more transparent by enhancing their climate-related and environmental disclosures. The consultation on this guide ends on September 25, 2020. ECB expects that comments on this consultation document will provide valuable input for the finalization of the guide, which it then intends to also use in the supervisory dialog.

    The guide aims to raise industry awareness of climate-related and environmental risks and to improve the management of such risks. The guide explains that ECB expects significant banks to use (stress) scenarios to assess if climate-related and environmental risks are material with regard to their business strategy and to inform their decisions. Furthermore, ECB expects institutions with material climate-related and environmental risks to evaluate whether their bank-internal stress testing is appropriate, with a view to incorporating those risks in their baseline and adverse scenarios. ECB wants banks to account for these risks, given that they drive existing prudential risk categories and can substantially impact the real economy and banks. Banks are expected to assess whether their current practices are safe and prudent in the light of the expectations and, if necessary, to start adapting them. 

    The guide was drafted in close cooperation with the national competent authorities to ensure that high supervisory standards are applied consistently across the euro area. It also draws on the experience gained from assessing banks’ current practices and their approaches to climate-related and environmental risks. The guide is designed to fit within the boundaries of applicable EU and national law. It aims to foster banks’ preparedness for managing climate-related and environmental risks under current prudential rules, in accordance with the EC Action plan on financing sustainable growth and the EBA Action plan on sustainable finance. ECB acknowledged that banks face significant challenges as a consequence of the COVID-19 pandemic. While the immediate attention of ECB is on the pandemic, it remains committed to further advancing the management and disclosure of climate-related and environmental risks in the banking sector.

     

    Related Links

    Keywords: Europe, EU, Banking, ESG, Sustainable Finance, Climate Change Risk, Disclosures, Stress Testing, CRD, Basel, ECB

    Featured Experts
    Related Articles
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    News

    SEC Extends Comment Period on Climate Risk Disclosures

    The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.

    May 09, 2022 WebPage Regulatory News
    News

    APRA Reduces Committed Liquidity Facility, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.

    May 09, 2022 WebPage Regulatory News
    News

    CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks

    The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.

    May 06, 2022 WebPage Regulatory News
    News

    PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down

    The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.

    May 06, 2022 WebPage Regulatory News
    News

    EBA Updates Standards for 2023 Benchmarking of Internal Approaches

    The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.

    May 06, 2022 WebPage Regulatory News
    News

    EIOPA Responds to Stakeholder Views on Blockchain in Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.

    May 06, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8179