European banks warned of climate-test risksBloombergThe European Central Bank (ECB) is stepping up pressure on lenders to prepare for stress tests next year that would show how vulnerable the industry is to climate change, people familiar with the process said yesterday. Investors are taking note as banks burdened by carbon-intensive loan books might face higher capital requirements, which could erode their power to pay dividends. The outcomes would be reflected qualitatively by potentially affecting the scores used to calculate individual banks’ capital requirements, it said. Credit rating agencies have also warned that the industry is behind when it comes to adapting to climate and social risks. Fitch previously said that new capital requirements based on climate risk are the “next logical step” for regulators in Europe.

Source: Taipei Times September 02, 2021 15:56 UTC