So we should foster a stronger risk management perspective and techniques with regard to climate-related risks; it is about having an adequate mapping and classification of “at-risk” assets and including them in banks’ forward-looking risk strategies with a longer time horizon than banks commonly use for assessing “traditional” risks.
In the first round, a framework was developed for monitoring the systemically important individual banks. The second round of SRP was directed to analyse banks’ exposure to sensitive sectors and identify outliers. Based on the analyses of these outlier banks, guidelines were issued to all banks indicating the need for better risk management systems in banks at operating levels.