Environmental Risks & Banking
Environmental risks are becoming systemic and a potential threat to financial stability. This paper aims to identify the current thinking on the relationship between banking regulation and environmental challenges, including climate change, and considers what regulatory and policy instruments are necessary to enable a transition to a more sustainable economy. Barriers to this transition are also discussed. The paper explores potential regulatory policy responses, on a cross-border and international basis, which could contribute to managing the financial stability risks associated with environmental challenges. The paper is aimed at financial professions, regulators, policymakers and researchers in the area of banking who seek to understand where this new field of research currently is and what evolution is to be expected.