Euro-Area Physical Risk Indicators for Climate-Related Financial Stability Analyses

Key Points

• Financial stability in euro-area economies is significantly influenced by climate-related physical risks, emphasizing risk assessment in finance.
• Key evidence indicates that minimized climate impacts can lead to improved financial stability metrics over time, with analysis across diverse sectors.
• Assessment using tailored indicators to identify and measure physical risks across various financial frameworks in the euro-area.
• Highlights the urgent need for continuous evaluation of climate-related risks to enhance financial governance and policy frameworks.