Supervisory authorities on both sides of the Atlantic are taking action to ensure that climate risks are appropriately assessed and accounted for by banks in their risk management practices. However, this is not just a transatlantic trend.
Thanks to the BCBS’s Task Force on Climate-Related Financial Risks, which I co-chair with Kevin Stiroh of the US Federal Reserve, concrete steps have been taken to merge existing international practices into an initial formal consensus at a global level. As a result, there is progress on all three pillars of the Basel Framework for the global prudential regulation of banks.