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Opinion Column, Denis Beau - France’s new step for the supervision of climate-related financial risk

24/05/2021 ACPR Visiter le site source Télécharger au format PDF

Denis Beau of the Banque de France explains the results of its pilot exercise, and what comes next


The pilot exercise on climate risk conducted by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR) is unprecedented. It is the first time that a supervisor has organised for the banking and insurance groups under its responsibility such a comprehensive and challenging exercise to assess their exposure and contemplated response to the transition and physical risks related to climate change.
Those physical and transition risks may have different but cumulative impacts. The ACPR, with the help of Banque de France staff, prepared this exercise in line with the guidelines created by the Network for Greening the Financial System (NGFS), and assessed two of the scenarios published by the NGFS in June 2020.
The innovative and ambitious nature of the pilot exercise lies in the specific features embedded. These include the 30-year time horizon over which financial risks related to climate change need to be assessed, the global geographical dimension, and the incorporation of policy and technological changes.
The global dimension is crucial for internationally active institutions like French banking and insurance groups...

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