On 24 June 2020, De Nederlandsche Bank (DNB) announced NGFS published climate scenarios for forward looking climate risks assessment, a user guide, and an inquiry into the impact of climate change on monetary policy.
16 Jul 2020
Central banks and prudential supervisors around the world are stepping up efforts to integrate climate-related risks into their work, in particular financial stability monitoring. In addition, central banks increasingly focus on the potential impact of climate change on price stability and its implications for monetary policy.
Highlighting the growing importance of climate change for central banks and supervisors, the NGFS publishes several deliverables aimed at fostering the integration of climate-related risks into their work:
- A first set of climate scenarios alongside a first-of-its-kind Guide to climate scenario analysis for central banks and supervisors. The NGFS scenarios have been developed to provide a common starting point for analysing climate risks, while the guide provides practical advice on using scenario analysis to assess these risks to the economy and financial system.
- A Report examining the possible effects of climate change on monetary policy. Based on a comprehensive review of existing literature and expert analyses, it provides early answers to the following questions: (i) How does climate change affect key macroeconomic variables? and (ii) What are the effects on the monetary transmission channels and central banks’ assessment of their policy space?
- A Report which lays out and discusses the NGFS research priorities related to the analysis of the macroeconomic and financial stability impacts of climate change.
This article was originally published in the June edition of REGWATCH. Read the full edition covering the following jurisdictions:
- European Union
- Hong Kong
- United Kingdom