UK Regulators Urge Banks, Insurers to Strengthen Climate Risk Management

Recent discussions among European and UK financial regulators have highlighted the increasing importance of climate-related risks in monetary policy and financial supervision. Frank Elderson from the European Central Bank stated that while central banks are not climate policymakers, they must account for climate risks to fulfill their mandates effectively. The UK's Prudential Regulation Authority reported that while banks and insurers have made progress in managing climate risks, significant gaps in data and risk management tools still exist. The Bank of England aims to enhance the financial system's resilience to climate change, indicating a need for more robust data and improved risk assessments. Furthermore, a recent survey by the Society of Actuaries revealed that climate change has emerged as a top concern for risk managers, alongside geopolitical risks and technological threats. This growing recognition underscores the interconnectedness of environmental challenges and financial stability.