PRA reviews risks of climate change to banks

The PRA has published a report examining the impact of climate change on banks in terms of financial risk implications.

The report notes that 70% of banks recognise that climate change poses financial risks to their business model, for example, and immediately, exposures to mortgaged homes at risk of flooding or by investments in countries experiencing extreme weather events.

To identify, assess and address these risks the PRA and the FCA will be establishing a Climate Financial Risk Forum with private sector participants, technical experts and relevant stakeholders.  The Bank of England is also engaging closely with other central banks and financial regulators, and considering system-wide financial risks.