Friday, 29 October 2021

UK: PRA report - climate change and the regulatory capital framework

The Prudential Regulation Authority has published a report exploring the links between climate change and the regulatory capital framework.  The report concludes that regulatory capital has a role to play in dealing with the consequences - the financial risks - of climate change, but notes that further work design and evaluation work is required.  In this regard, the PRA plans to publish a call for research and host a conference. The aim is to provide more guidance by the end of 2022. A copy of the report, titled Climate Change Adaptation Report 2021 - Climate-related financial risk management and the role of capital requirements, is available here (pdf).

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