In November of last year, ECB Banking Supervision published a guide on climate-related and environmental risks.2 In that guide, we make it clear that we expect banks to take a comprehensive, strategic and forward-looking approach to disclosing and managing all climaterelated and environmental risks – which also include, for example, the risks of biodiversity loss and pollution.3 We then asked banks to conduct a self-assessment relating to the expectations we set out in that guide, and to draw up action plans for how they intend to comply with them.
High returns on equity - just less than 12 percent for community banks - and a steady flow of new bank charter applications and approvals suggest that banking has been and remains a profitable industry. The continuing strength of the financial sector is also visible in supervisory ratings.