Climate change can have a spillover effect on financial stability

Analysis – December 2019 – No. 26

Authors Danmarks Nationalbank
Subject Financial stability; Climate; Financial regulation
Type Analysis
Year 2019
Published 2 December 2019
Abstract icon This analysis is a first step in Danmarks Nationalbank's efforts to understand how climate change may affect macroeconomic and financial stability. Climate change may pose risks to the financial sector and financial stability. Financial institutions should understand and incorporate these risks into their risk management, and financial regulation should reflect the actual risks. A sound financial sector can contribute to the transition to a green economy by ensuring continued allocation of capital.