Iceland: Financial Sector Assessment Program-Technical Note on Management and Supervision of Climate-Related Financial Risks in the Banking Sector

International Monetary Fund

No 2023/278, IMF Staff Country Reports from International Monetary Fund

Abstract: This technical note on Iceland presents analyses management and supervision of climate-related financial risks in the banking sector. The Icelandic authorities are committed to addressing climate change issues and reaching ambitious objectives to reduce greenhouse gas emissions. Domestic coordination with the Central Bank of Iceland (CBI) should be enhanced to support adequate consideration of climate-related financial risks within the financial sector. CBI should as soon as possible address the data quality and availability issues on climate-related financial risks. CBI has started to incorporate climate-related financial risks within the macroprudential surveillance and supervisory processes. The intensity and thoroughness of systematic supervision of climate-related financial risks within the banking sector should be gradually increased. In addition, banks should fully incorporate climate-related financial risks into their risk management frameworks in addition to their commendable efforts toward transparency. Finally, CBI should determine whether banks’ capital and liquidity buffers are adequate to cover climate-related financial risks.

Keywords: climate-related financial risks; government initiative; EU norm; Climate-Related Financial risk; Iceland's strategy; Climate change; Commercial banks; External balance assessment (EBA); Credit risk; Global (search for similar items in EconPapers)
Pages: 60
Date: 2023-07-28
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=537023 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2023/278

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi (amodi@imf.org).