PRA Publishes Summary of Third Meeting of Climate Financial Risk Forum
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the form of the outputs and the timeline for publishing them, with focus on getting wider industry input on the draft guidance and recommendations in early 2020.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.
Related Links
Keywords: Europe, UK, Banking, Insurance, Securities, Climate Change Risk, Climate Financial Risk Forum, ESG, CFRF, FCA, PRA
Previous Article
PRA Consults on Management of Prudential Risks on Asset EncumbranceRelated 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.