Sustainability-Related Risks and Financial Stability: A Systemic View and Preliminary Conclusions

Marco Migliorelli (), Nicola Ciampoli () and Philippe Dessertine ()
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Marco Migliorelli: IAE Université Paris 1 Panthéon-Sorbonne (Sorbonne Business School)
Nicola Ciampoli: LUMSA University
Philippe Dessertine: IAE Université Paris 1 Panthéon-Sorbonne (Sorbonne Business School)

Chapter Chapter 5 in Sustainability and Financial Risks, 2020, pp 119-139 from Palgrave Macmillan

Abstract: Abstract This chapter discusses the possible impact of sustainability-related factors (such as climate change, environmental degradation, social inequality, policy and technology shifts) on financial stability. To this extent, it first identifies the areas in which an evolution of the practices of financial intermediaries are necessary to better manage sustainability-related risks. This refers in particular to the existing risk-management frameworks (which may not consider sustainability-related risks) and to the timespan of the risk-taking strategies (which typically underestimate the long-term nature of sustainability-related risks). Hence, the chapter discusses a set of policy actions to both mitigate and control for sustainability-related risks. In this respect, it focuses on the need of evolving the prudential supervisory approaches and on the possibility to assign a more active role to central banks.

Keywords: Sustainability-related risks; Climate change-related risks; Financial stability; Risk management frameworks; Macroprudential supervision; Central banks (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-030-54530-7_5

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DOI: 10.1007/978-3-030-54530-7_5

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