By Rens van Tilburg, Seraina Grünewald, Dirk Schoenmaker, and Arnoud Boo
Climate risks are building up on banks’ balance sheets. Supervisory reviews show that banks are not well prepared. Yet, supervisors have been slow to include climate risks in minimum capital requirements. This column argues that doing so would speed up the transition to a low-carbon economy. Given the urgency of addressing the environmental risks that are now largely not accounted for, speed is of the essence.
Link: Climate risks are real and need to become part of bank capital regulation