Climate Risk and its Impact on Banks Stability: Measuring and Managing Environmental Financial Risks
Climate Risk and its Impact on Banks Stability: Measuring and Managing Environmental Financial Risks

Author(s): Martin Dikanski
Subject(s): Economy, Business Economy / Management, Energy and Environmental Studies, Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Climate risk; Bank stability; Sustainable finance; ESG; Climate stress testing
Summary/Abstract: Climate change has become a key source of financial risk for banks, affecting asset values, credit quality, and overall financial stability. This paper analyzes how physical, transition, and liability climate risks influence bank risk profiles and systemic stability. It also examines methods for measuring climate risk, including stress testing and disclosure frameworks, and discusses management strategies within a sustainable finance context.

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