ECB to run climate risk stress test


ECB to run climate risk stress test

The European Central Bank (ECB) has launched a supervisory climate risk stress test to assess how prepared banks are for dealing with financial and economic shocks stemming from global warming.

Webinar | Central banks, Climate change and Stress Testing

This webinar focus on the leadership central banks have been showing to encourage banks and insurers to better understand and manage climate risks. We will discuss the progress in developing climate scenarios with which to run stress tests.

Panelists will reflect on the work their institutions have been undertaking and comment on challenges in terms of developing realistic scenarios, communicating the need for climate risk assessment to supervised entities and the readiness of banks and insurers to consider climate risks.

Moderator: Sean Kidney


– Sarah Breeden, Executive Director, UK Prudential Regulatory Authority
– Jessica Chew, Deputy Governor, Bank Negara Malaysia
– Prashant Vaze, Head of Policy & Government, CBI

ECB Supervisory Board Member: ‘We will make new stress tests with focus on climate risk’

Kerstin af Jochnick, member of the ECB’s Supervisory Board, discusses the growing impact of climate risk in the European banking sector.

ECB Climate Risk Stresstest – Operational Risk

ECB Climate Risk Stresstest Methodology was published on October 18, 2021. This exercise aims to assess the impact of climate risks on operational risk. We have summarized the most important aspects about operational risk within the ECB Climate Risk Stresstest in our video.

If you have any questions on the ECB Climate Risk Stresstest 2022, do not hesitate to contact us.

[email protected]
[email protected]

The ECB Podcast – Time to act now: results of the economy-wide climate stress test

We at the ECB conducted our first economy-wide climate stress test this year. What are the results? And what do they mean for people, companies, and banks?

In this episode of The ECB Podcast, our host Katie Ranger discusses these questions with Vice-President Luis de Guindos and Irene Heemskerk, the head of our climate change centre.

The views expressed are those of the speakers and not necessarily those of the European Central Bank.

Published on 22 September 2021 and recorded on 9 September and 15 September 2021.

In this episode:
01:11 – Our first economy-wide climate stress test
How climate risks affect people, companies and banks in the euro area, how our climate stress test was carried out, and its main results.

11:24 – Our role as a central bank against climate change
How climate change affects both financial and price stability, and the actions foreseen in the climate action plan we revealed in July 2021, following our strategy review.

13: 25 – Our first guest’s “hot tip” for our listeners
Our guest Luis de Guindos shares what motivates him to work in the fight against climate change: solidarity with future generations.

15:10 – The work of the climate change centre
The purpose of our climate change centre, how things are going so far and what kind of people work there.

19:31 – The next steps of our climate action plan
How the economy-wide climate stress test will feed into the two other stress tests that we will conduct in 2022, on banks and on our own balance sheet.

26:14 – Our second guest’s “hot tip” for our listeners
Our guest Irene Heemskerk shares the story behind a picture in her home office that clearly shows how disastrous the consequences of climate change can be.

Further reading:
Firms, banks benefit from early adoption of green policies, ECB’s economy-wide climate stress test shows…ade4710b.en.html

ECB economy-wide climate stress test…5a7735b1c.en.pdf

ECB Blog post by Luis de Guindos: Shining a light on climate risks – the ECB’s economy-wide climate stress test…bc68ffc5.en.html

The ECB climate change action plan…04919225.en.html

The ECB climate change roadmap…ml/index.en.html

European Central Bank

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