In the current situation, the most pressing issue is to engage in an in-depth dialogue with financial institutions about measuring climate-related financial risks and about a framework and methods to manage the risks. Meanwhile, when considering revisions to financial regulations, it is a prerequisite that a framework for measuring risks is prepared and that discussion based on solid evidence becomes possible.
Bearing these basic ideas in mind, the Bank of Japan is engaged in active dialogue with financial institutions on how to grasp and manage climate-related financial risks. The Bank intends to further accelerate these initiatives. At the same time, the Bank of Japan itself has to extend its knowledge of the methods used to measure these risks, such as stress testing.