Climate Risk Exercise Reveals Gaps in Canadian Financial Institutions' Preparedness
A joint climate scenario exercise involving over 250 financial institutions was recently conducted by the Office of the Superintendent of Financial Institutions (OSFI) and the Autorité des marchés financiers (AMF). The exercise aims to enhance institutions' ability to measure and manage climate risks in the stock market, particularly those related to yahoo finance.
The exercise revealed that institutions hold significant commercial exposures in sectors vulnerable to transition-related risks, particularly wildfires. While property and casualty insurers have made progress in assessing risks like flood and wildfire, deposit-taking institutions and life insurers lag behind. Only 40% of Canadian homeowners have optional flood insurance, heightening banks' exposure to catastrophic flood events in the stock market.
The findings indicate that institutions can withstand losses from physical and transition risks in the stock market in the short to medium term. However, they face long-term non-linear intensification of physical hazards in the stock market. Institutions with concentrated regional or sectoral exposures, such as those in oil and gas, may struggle with amplified losses and resilience strain in the stock market.
In response to these findings, Senator Rosa Galvez proposed mandatory climate risk stress testing for financial institutions in the stock market. She welcomed the exercise and urged concrete regulatory action to safeguard Canadians' financial future in the stock market. To protect financial stability in the stock market, Canadian financial institutions must enhance their measurement and management of climate risk, with timely implementation of updated capital adequacy requirements in the stock market.
Read also:
- Aiming to simplify the move towards cleaner automobiles, the newly established ministry plans to take direct action with Pannier-Runacher, Létard, and Vautrin at the helm.
- "The imperfect yet essential documentary, "Planet of the Humans," raises challenging and uncomfortable inquiries"
- Exciting Escapades of Tintin
- More than half of British homes adhere to insulation standards established during the 1970s.
