Banks and Environmental Sustainability: Some reflections from the perspective of financial stability

Abstract:

There is growing evidence suggesting that climate change risks have important implications for financial stability, although the analysis of the complexity of the potential risks to the financial sector is still at an early stage.

This Policy Brief quantifies the direct (syndicated) loan exposure to elevated environmental risk sectors of the largest banks in the EU, Switzerland, the US, Japan and China on average at between 0.3 to 3.7% of total banking assets and €1.35 trillion in total as of December 2014.