Fatih Kansoy
What we are going to learn
The fundamental definitions and approach
The mechanism and transmission channeles of risks
The potential roles of central banks
What we have learned - Q & A Time
According to NASA; climate change describes a change in the average conditions — such as temperature and rainfall — in a region over a long period of time
It's a crisis, not a change. Thus, climate change is no longer considered to accurately reflect the seriousness of the overall situation.
Climate crisis is likely to increase the severity and frequency of extreme events
These events can lead to property damages, lower productivity and severe economic disruptions that could result in financial losses.
Such losses could destabilise both the insurance sector and the banking system.
Climate Risks | Economic Risks |
Financial Risks |
Financial Stability Risks | |
---|---|---|---|---|
Real Estate | Rising sea levels, frequency of storm surges | Increased inundation of coastal parcels |
Decreased value of coastal real estate |
Abrupt repricing of mortgage lending markets |
Insurance |
More frequent and severe hurricanes, wildfires, etc. |
Greater disruption to local economic activity |
Pressure for higher rates, lower supply of insurance and reinsurance | Greater uninsured losses, spillover effects |
Offering loans at a below-market rate to support ‘environment businesses’ (B. of Japan)
Credit quota: Bank loans should be directed to environmental friendly sectors (Bangladesh)
Using Environmental, Social, and Corporate Governance (ESG) criteria for the government’s pension fund and excludes coal-based energy companies (The Norge Bank)
Green Quantitative Easing (ECB)