FCA and PRA Host Fourth Meeting of Climate Financial Risk Forum
FCA and PRA hosted the fourth meeting of the Climate Financial Risk Forum (CFRF) in July 2020. The Forum discussed how to publicize and promote the use of CFRF guide, which was published on June 29, 2020, by the financial services industry. The next CFRF meeting will take place in the fourth quarter of 2020. At the next meeting, the Forum will work to reach an agreement on the workplans and approaches and will discuss the possible next steps to support COP26, which is the international climate summit that the UK will host in November 2021.
CFRF agreed that, to maintain momentum in its early years, all current members would continue into the second year and that membership would be widened to include a small number of asset owners, along with other regulators that would be invited to observe. CFRF then went on to discuss the strategy for the second year of work. CFRF agreed that the four existing working groups would continue with the current chairs and secretariats. These working groups address the topics of: risk management, scenario analysis, disclosures, and innovation. Once the workplans are agreed between the regulators and the working group chairs, the working group membership will be refreshed to ensure that there is an appropriate variety of skills and experiences around the table; this is likely to include a mix of existing and new members. There was broad agreement that each working group would have a two-fold focus. One of these areas of focus is to undertake a thematic piece of work on metrics, data, and methodologies while the second area of focus is to build on the CFRF guide, by progressing and refining the recommendations, particularly highlighting how firms can effectively implement these approaches.
Related Link: Meeting Update
Keywords: Europe, UK, Banking, Insurance, Securities, CFRF, Climate Change Risk, Climate Financial Risk Forum, ESG, Disclosures, Stress Testing, COP26, FCA, PRA
Featured Experts
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
Nihil Patel
Data scientist; SaaS product designer; credit portfolio analyst and product strategist; portfolio modeler; correlation researcher
Previous Article
HKMC Enhances Terms of SME Loan Guarantee Scheme Amid PandemicRelated Articles
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
ISSB Standards Shine Spotlight on Comparability of ESG Disclosures
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
EBA Issues Several Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
BCBS Proposes to Revise Core Principles for Banking Supervision
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
US Proposes Final Basel Rules, Transition Period to Start in July 2025
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
FSB Report Outlines Next Steps for Climate Risk Roadmap
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.
