Eurozone banks fail to factor in climate risks, says ECB

Eurozone banks are failing to measure and manage climate risk properly, with only a fifth considering it a variable when making loans, the European Central Bank has said.

The warning came as the ECB completed its first climate-related stress tests on banks in the common currency bloc. The results will not directly impact lenders’ capital, but may affect it indirectly through the assessments banks receive from the ECB regarding risk management and governance. The ECB did not name any of the banks involved in the exercise.


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