Climate-related financial risk is a much more debatable issue in contemporary banking regulation literature. Bank for International Settlements (BIS) has issued detailed consultative instructions for the disclosure of climate-related risk for financial institutions and other member countries of BIS that are attempting to map and formulate mitigating strategies for climate-related financial risk. Besides, the European Central Bank has started to publish climate-related financial risk disclosures. This paper critically reviewed the BIS consultative document and climate-related financial risk disclosure issued by the European Central Bank (Eurozone). We shed an analytical light on how those prudential documents help to combat climate-related financial risk. In addition, we offer a primary framework to enhance the coverage of the disclosure of the climate-related financial risk of the bank. This paper contributes to the ongoing debate on mapping and mitigating strategies for climate-related risk. We offer a few policy recommendations to the regulator to tackle this issue more prudently.
Aznan Hasan (Wed,) studied this question.
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