ECB Bank Stress Test to Take Harsher View on Climate Change (1)

Jan. 14, 2022, 3:06 PM

Europe’s banks will be told to brace for a much more rapid fallout from global warming than previously assumed, according to people familiar with the design of this year’s climate stress tests.

European Central Bank stress tests due to start this quarter will ask banks to gauge the impact on their books of governments failing to mitigate climate change. In that scenario, they’re being asked to prepare for conditions expected for 2080 four decades earlier, according to people with knowledge of the matter. The ECB is expected to brief banks on the scenarios later this month, the people said.

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