Podcast: Climate Risk and Its Implications for Financial Stability

Resource description: This webinar explores the implications of climate risk for financial stability. It examines how climate change creates physical, liability, and transition risks, and how financial actors can address them through disclosure and risk management.

Key insights:

1. Climate risks can disrupt asset values, reshape markets, and undermine financial stability
2. Disclosure standards are inconsistent and often fail to capture firms’ climate exposures
3. Policy uncertainty increases transition risk, making carbon pricing and long-term planning difficult
4. Subnational bond markets and fossil-dependent economies may face rising instability
5. Scenario analysis, stress testing, and shadow pricing can support better risk preparedness

Why this matters: The resource underscores the role of supervisors in promoting transparency, identifying vulnerabilities, and enhancing the resilience of the financial system to climate-related risks.