BoE Governor Bailey Sets Date For Climate Stress Test For Banks And Insurers

BoE Governor Bailey Sets Date For Climate Stress Test For Banks And Insurers

09 Nov 2020 06:00 PM
 

Environmental groups have criticised the BoE for including debt issued by energy companies and other businesses with significant greenhouse gas emissions in asset purchase programmes designed to support the economy.

Bailey announced the BoE was setting a date of June 2021 for a climate ‘stress test’ for banks and insurers, akin to the regular stress tests introduced after the financial crisis designed to ensure lenders can withstand severe economic shocks.

The BoE would not impose new capital buffers on lenders as a direct result of the test - which has been delayed because of the pandemic - but would tell banks to think through their capital needs.

“The BoE was working with Britain’s finance ministry on future requirements for climate risk disclosure within the financial sector”, Bailey said.