Featured Product

    BCBS Taskforce Holds Workshop on Climate-Related Financial Risks

    November 19, 2020

    The BCBS Task Force on Climate-related Financial Risks (TFCR), which was established in February 2020, held a virtual workshop in October 2020. The TFCR is undertaking analytical work related to the transmission channels of climate-related financial risks to the banking sector and the measurement methodologies of such risks. The information gathered during the workshop will contribute to the development of the analytical reports of the taskforce. Overall, there was broad agreement on the value of strengthening cooperation and knowledge-sharing among banks, supervisors, and policy makers, to address climate-related financial risks in a more harmonized and efficient manner.

    The taskforce met with senior representatives from internationally active banks and associated industry associations to discuss how banks assess and address climate-related financial risks in practice. At the workshop, panelists from internationally active banks shared their views regarding transmission channels of climate-related risks to the banking sector and individual banks. They also discussed methodologies used or being considered to measure climate-related financial risks and the use of the methodologies in risk management procedures of banks. Banks reported progress and future work in incorporating climate-related financial risks into existing risk management frameworks and governance structures, which requires making adjustments and enhancements to reflect the unique and complex nature of climate-related risks. Panelists highlighted the benefits of international coordination in developing regulatory requirements, reporting standards and disclosure expectations. Several panelists identified the potential benefits of principles-based guidance from international standard-setting bodies to align the development and phasing-in of climate risk requirements.

    With respect to climate risk stress testing, panelists described the role of scenario analysis and models in quantifying transition and physical risks, noting the considerable uncertainty surrounding the scale and speed at which climate change will occur, which makes assumptions difficult to narrow down. Moreover, the longer-term time horizon over which the most severe scenarios may materialize is beyond the existing risk measurement or planning horizon of banks. Panelists discussed limitations with respect to data availability and quality as well as challenges in translating climate scenarios into financial risks parameters. Banks noted they are considering how to best translate the results of climate scenario analysis into financial planning and use the results to drive internal decision making to address these risks. Panelists described efforts to enhance scenario analysis and narrow the gaps on assumptions on climate scenarios. The NGFS Climate Scenarios were identified as being helpful in providing a common starting point for analyzing climate risks.  

     

    Related Link: Workshop Update

     

    Keywords: International, Banking, TFCR, Scenario Analysis, NGFS, Climate Change Risk, Disclosures, ESG, BCBS

    Related Articles
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    HKMA Consults on FIRO Code, Revises Policy on Foreign Exchange Risk

    The Hong Kong Monetary Authority (HKMA) is consulting on the draft Financial Institutions (Resolution) Ordinance (Cap. 628), or FIRO, Code of Practice chapter on liquidity and funding in resolution, until March 14, 2022.

    January 18, 2022 WebPage Regulatory News
    News

    FI Publishes Multiple Regulatory and Reporting Updates

    The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.

    January 17, 2022 WebPage Regulatory News
    News

    EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues

    The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.

    January 17, 2022 WebPage Regulatory News
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7903