QOTD -- Climate Risk Management & Disclosure
The Bank of England starts the week with a massive (203 page) release on how financial institutions should measure, manage and disclose climate-related risks.
Technically, the Climate Financial Risk Forum Guide 2020 is not formal Bank of England policy. The Forum is a group of private sector entities convened by the Bank's two financial regulators (the Financial Conduct Authority and the Prudential Regulation Authority).
However, the regulators prepared an official summary, the materials are all hosted on the Bank of England website, and as the quote above illustrates the direction of thinking is profoundly prescriptive. With individual 50+ page chapters covering risk management, scenario analysis, disclosure, and innovation, the message to market participants is clear: policymakers at least in London are focused on nudging the market to provide far more structured and comprehensive data regarding climate risk exposures despite the pandemic.
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