A chilly reception for climate risk capital
Bankers don’t believe climate-adjusted risk-weights will enter Europe’s prudential framework – not for now, at least
Just as polar ice caps are receding, so are the chances of European lawmakers adopting a radical proposal to force banks to hold punitively high levels of capital against carbon-intensive loan portfolios.
The plan is part of a wider package of amendments to the European Union’s capital regime tabled by members of the European Parliament. But bankers and consultants believe that the idea is unlikely to pass into law when the final rules are adopted in a little over two years’ time.
“It’s quite
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