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The FSB, set up as a result of the 2008 financial crisis, stated that global climate risks are “far-reaching” and require a coordinated response.
The dual threats of COVID-19 and climate change are primarily due to human activities. magic credit: Pixabay
On Wednesday, a leading international financial body called on G20 finance ministers and central bank governors to better respond to growing climate-related financial risks by warning of their “far-reaching” effects.
The Swiss Financial Stability Board submitted a roadmap ahead of the G20 in Venice later this week.
Established after the 2008 financial crisis, the FSB noted that global climate risks are “far-reaching” and require a coordinated response.
“They are global in nature and have implications for all units, sectors and economies,” the document states.
It referred in particular to business disclosure requirements, data and the use of consistent indicators, vulnerability analysis and regulatory and supervisory practices.
Today we have published three reports #climate change and #financial stability for # G20 https://t.co/SFtNeoDU08 pic.twitter.com/F8ez2Yzx8K
– FSB (@FinStbBoard) July 7, 2021
“The aim is for all financial risk decisions to take due account of climate change,” he said in a roadmap addressed to the finance ministers of a group of 20 Member States – the world’s 19 largest economies and the European Union.
Ahead of the Venice meeting, the FSB also called on the G20 to step up efforts to move away from the scandal-stricken interbank interest rate in Libor.
The roadmap for tackling climate-related economic risks outlines the work to be done over a multi-annual period in four key policy areas. https://t.co/qbs6KZ0ehS #financial stability pic.twitter.com/ZdCUr5z7Qd
– FSB (@FinStbBoard) July 7, 2021
In addition, it urged them to investigate COVID-19
crisis, including money market funds.
“The global financial system has so far survived COVID thanks to the greater flexibility and rapid, bold and determined international action brought by G20 financial legislation reforms,” said Randal Quarles, President of the FSB.
But he warned that there were areas where coronavirus the pandemic had highlighted vulnerabilities that need to be addressed urgently.
The FSB will publish a mid-term report later this month on the lessons learned from the crisis and how it has affected global financial stability.