The Challenge of Climate Risk Modelling in Financial Institutions – Overview, Critique and Guidance
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| Format: | Recurso digital |
| Langue: | anglais |
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Zenodo
2023
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| _version_ | 1866901686370435072 |
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| author | Cormack, Chris Shrimali, Gireesh |
| author_facet | Cormack, Chris Shrimali, Gireesh |
| contents | <p>This paper discusses the various general issues with climate risk modelling in financial institutions, including data availability and quality, model uncertainty, and integrating climate risks into risk management frameworks. We highlight the quantitative model risk issues in some commonly used frameworks including the recent ECB modelling framework and publicly available models as well as an overview of useful features of academic models and commercial models.</p> <p>We discuss frameworks for assessing climate risks and propose necessary and desirable model features to meet the needs of financial stakeholders to assess climate risks. The objective is to build a view of how modelling frameworks can better serve the needs ot stakeholders in an economy, from members of the populace, banks, investors, central banks, and policymakers. Specifically we argue that risk management methodology as typically used in finance needs to evolve to better reflect the real world economy, such as the impacts from physical risks and policy driven climate risks.</p> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_16614595 |
| institution | Zenodo |
| language | eng |
| publishDate | 2023 |
| publisher | Zenodo |
| record_format | zenodo |
| spellingShingle | The Challenge of Climate Risk Modelling in Financial Institutions – Overview, Critique and Guidance Cormack, Chris Shrimali, Gireesh climate risk Risk analysis <p>This paper discusses the various general issues with climate risk modelling in financial institutions, including data availability and quality, model uncertainty, and integrating climate risks into risk management frameworks. We highlight the quantitative model risk issues in some commonly used frameworks including the recent ECB modelling framework and publicly available models as well as an overview of useful features of academic models and commercial models.</p> <p>We discuss frameworks for assessing climate risks and propose necessary and desirable model features to meet the needs of financial stakeholders to assess climate risks. The objective is to build a view of how modelling frameworks can better serve the needs ot stakeholders in an economy, from members of the populace, banks, investors, central banks, and policymakers. Specifically we argue that risk management methodology as typically used in finance needs to evolve to better reflect the real world economy, such as the impacts from physical risks and policy driven climate risks.</p> |
| title | The Challenge of Climate Risk Modelling in Financial Institutions – Overview, Critique and Guidance |
| topic | climate risk Risk analysis |
| url | https://doi.org/10.5281/zenodo.16614595 |