Looking over the Horizon: The Case for Prioritizing Climate-Related Risk Supervision of Banks

June 6, 2022

The climate crisis is creating financial risks that banks and their regulators must address. These take the form of both physical risks—extreme temperatures, wildfires, human migration—and transition risks—the threat that stranded fossil fuel assets will pose to the financial system during a rapid transition. Regulators must take immediate action in order to minimize both threats to financial stability.