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Banking supervision of climate-dependent financial risks: methodological aspects

Annotation

Climate change is increasingly attracting the attention of central banks and financial regulators today, as it can affect the safety and reliability of financial institutions, and, consequently, the entire financial system. Therefore, in order to make the financial system safe and sustainable, strict financial regulation and supervision are necessary. The subject of the study is the principles and tools of banking supervision of financial risks related to climate change. The purpose of the work is to summarize research and best practices for improving the prudential supervision of the Bank of Russia over climate–related financial risks. The object of the study is climate-dependent financial risks. The methods used in the research are general, general scientific and private scientific methods, methods of comparative analysis. The various actions and approaches of a number of central banks, as well as the Basel Committee on Banking Supervision, to the regulation and supervision of financial risks related to climate change are considered. The analysis of the types and features of climate risks, as well as the principles of banking supervision of financial risks associated with climate change, is given. An important place in the activities of central banks, financial regulators, and various international organizations is occupied by the development of climate scenarios, which are mainly used to better understand the consequences of climate risks. Measures on banking supervision of climate risks in the Russian banking system are proposed.

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