One study, in particular, considers the channels through which climate-related risks are propagated to the economy as a whole. It finds that these risks will affect the earnings of the corporate sector, and this will have an impact on their probabilities of default, value of debt and equity.
6  BIS Review 20/2006  You will undoubtedly be aware that Pillar II (the so-called Supervisory Review Process) of the new Capital Accord deals (amongst others) with the treatment of risks that are not fully covered by the requirements under Pillar 1 14 .