Common minimum standards for incorporating climate change risks into in-house credit assessment systems in the Eurosystem

Julia Körding and Florian Resch

Economic Bulletin Boxes, 2022, vol. 6

Abstract: In-house credit assessment systems (ICASs) of euro area national central banks are an important source of credit risk assessments for credit claims from non-financial corporates. These credit claims can be pledged as collateral in monetary policy operations. Climate change and the transition to a greener economy can affect the growth, financial performance, market position and business model of a company, and hence its creditworthiness. Therefore, as part of the ECB’s action plan for including climate change considerations in monetary policy implementation, the Governing Council has agreed a set of common minimum standards on incorporating these risks in ICAS rating processes. Assessments of climate change risks will mainly focus on the companies most affected and those which pose the highest risk to the Eurosystem. The analysis will be performed at firm level whenever sufficient data is available, using state-of-the-art methods and metrics. All ICASs will comply with the common minimum standards from end-2024 onwards. JEL Classification: G32, Q54

Keywords: climate change; ICAS; risk management (search for similar items in EconPapers)
Date: 2022-09
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.ecb.europa.eu//press/economic-bulletin ... 6~d7f88f706f.en.html (text/html)

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:ecb:ecbbox:2022:0006:6

Access Statistics for this article

More articles in Economic Bulletin Boxes from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().