In his day, this was caused by a volcanic eruption far away on an Indonesian island. The year 1816 went down in history as the “Year Without a Summer”. People suffered from the cold and from persistent rain; crops failed and famine broke out. Second, transition risks relate to the process of adjustment towards a lower-carbon 1/3  BIS central bankers' speeches  economy.
Both the physical impact of climate change and the transition to a less carbon-intensive economy can be a source of financial risk. For example, the ECB found in a sample of euro area banks that the exposures to the twenty largest emitters of carbon account for 20% of total large exposures.