10/19, 1:42 PM (Source: TeleTrader)
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ECB: Banks must lead by example on climate crisis

Member of the European Central Bank's (ECB) Executive Board Frank Elderson described on Tuesday climate change as an "international and intergenerational issue" that requires financial institutions to respond with action to avoid "widespread economic consequences."

Elderson remarked central banks and supervises must lead by example and include "climate and environmental risks into our activities, both in a systematic manner and with a long-term perspective." "This year has demonstrated [...] that the consequences of the climate crisis are not just a long-term underlying threat but that they are materializing here and now," he noted.

Elderson added the ECB will conduct a "full supervisory review of banks' practices for incorporating climate risks into their risk frameworks" and a "supervisory stress test with a focus on climate-related risks" to find the best solutions for adapting actions against climate change to financial policies. "The main risk is inaction," he warned.

Baha Breaking the News (BBN) / JR