ECB’s Schnabel: Climate change is an existential threat with large downside tail risks.

  • Climate-related and environmental risks (C&E risks) are now an important focal point for supervisors
  • Climate change constitutes an existential threat, implying large downside tail risks.
  • Dealing with financial risks is the core of prudential supervision
  • Physical climate risks tend to be correlated globally
  • The economic consequences of physical climate risks could be mitigated by closing the large climate insurance protection gap.
  • In the EU, only a quarter of losses caused by climate-related catastrophes are insured

This article was written by Adam Button at Source