ECB Warns Climate Crisis Threatens Eurozone Stability, Plans Bank Risk Analysis This Year
Updated
Updated · The Guardian · Aug 1
ECB Warns Climate Crisis Threatens Eurozone Stability, Plans Bank Risk Analysis This Year
3 articles · Updated · The Guardian · Aug 1
Summary
Frank Elderson said the ECB is intensifying scrutiny of climate and nature-related threats, warning they are becoming a material risk to eurozone financial stability.
Later this year, the central bank plans to publish analysis on how ecosystem degradation pathways could feed through to credit losses at the eurozone’s banks.
Elderson said collapsing ecosystem services — from water systems to habitats that support food production — can hit credit risk, growth, inflation and, over time, financial stability.
Wildfires in France and Spain amid record heat underscore the economic damage from more frequent disasters, even though Elderson’s interview was conducted before the latest destruction.
The ECB’s push comes as Europe takes the lead on climate-risk oversight after the Trump administration pulled the US out of the NGFS last year.