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Central bank chiefs sound warning on climate change

Central bank governors from the UK, France and the Netherlands are considering increasing regulatory oversight to address climate-related risks to the financial system, including carbon stress tests for banks.

Speaking at a meeting of financial supervisors in Amsterdam, Bank of England governor Mark Carney warned of the “catastrophic impacts” of climate change and the dangers that could result from an abrupt transition to a low-carbon economy.

François Villeroy de Galhau, head of the French central bank, at the same gathering lobbied for compulsory disclosure of EU banks’ and insurers’ climate-related risks, penalties for investing in assets linked to high emissions, as well as carbon stress tests for all financial institutions — a measure that would be unprecedented for the banking sector.

photo credit: Bank of England

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