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Financial Stability and Climate Change
- Source :
- Journal of Central Banking Theory and Practice, Vol 9, Iss 3, Pp 27-43 (2020)
- Publication Year :
- 2020
- Publisher :
- Sciendo, 2020.
-
Abstract
- Fighting climate change is one of the biggest challenges in the 21st century. Climate change that leads to global warming has been increasingly visible in our environment. Extreme weather conditions such as hurricanes, floods, and droughts have been escalating and their acceleration can be expected in the future. They cause changes in sea levels, epidemics, large fires, etc. Increasingly, we are witnessing minor or major damage caused by these extreme weather conditions. Numerous studies have proven that climate change has negative impact on economic growth and prosperity. However, this paper starts from the premise that in addition to unequivocally identified threats, climate change also creates opportunities. The paper reaches a conclusion that climate change can adversely affect balance sheets of financial institutions. Therefore, climate change is a source of financial risk and thus a part of the mandate of central banks and supervisors in preserving financial stability. This type of risk has not been given enough attention by either supervisors or financial institutions over the past period. This paper develops a model for managing financial risks as a result of climate change.
- Subjects :
- Economics and Econometrics
q54
Natural resource economics
Strategy and Management
media_common.quotation_subject
Climate change
Natural environment
Extreme weather
0502 economics and business
Balance sheet
050207 economics
media_common
050208 finance
HG1501-3550
Financial risk
05 social sciences
Global warming
Banking
climate change
financial risks
Mandate
Prosperity
Business
e58
General Economics, Econometrics and Finance
Finance
management
financial stability
Subjects
Details
- Language :
- English
- ISSN :
- 23369205
- Volume :
- 9
- Issue :
- 3
- Database :
- OpenAIRE
- Journal :
- Journal of Central Banking Theory and Practice
- Accession number :
- edsair.doi.dedup.....0f25c1e58412ddddad3d1baadb2e478f