Basel Committee issues consultation on climate-related financial risks

The Basel Committee on Banking Supervision (BCBS) has announced the launch of a public consultation on proposals for the effective management and supervision of climate-related financial risks.

The move follows the publication of a series of analytical reports earlier this year.

The Committee, which is the primary global standard setter for the prudential regulation of banks, said that it is taking a “holistic” approach to addressing climate change related financial risks to the global banking system.

This includes the assessment and consideration of disclosure, supervisory, and regulatory measures.

Its 45 members comprise central banks and bank supervisors from 28 jurisdictions.

Through this public consultation, the Committee seeks to "promote a principles-based approach to improving both banks' risk management and supervisors' practices related to climate-related financial risks."

The principles also seek to achieve a balance in providing a common baseline for internationally active banks and supervisors, while retaining sufficient flexibility given the evolving practices in this area.

"The Committee intends to monitor implementation across member jurisdictions to promote a common understanding of expectations, support the development of harmonised practices and facilitate implementation of the principles as soon as possible," it said in a statement.

The deadline for comments for the consultation is 16 February 2022.

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