Climate-related prudential regulation: emerging perspectives and policy implications

What is it about?

This paper addresses the main emerging research perspectives on climate-related prudential regulation and their policy implications today. It is situated within the recent developments of such regulation in the United States and the European Union, given the high concentration of Global Systemically Important Banks (G-SIB) in these regions. Through a critical analysis on the current literature, five emerging perspectives on this field of research have been identified:compensation policy, biodiversity loss, financed emissions, systemic risks, and sustainability taxonomies . They provide invaluable insights into the pressing need for a harmonized and adaptive regulatory framework.

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Photo by micheile henderson on Unsplash

Photo by micheile henderson on Unsplash

Why is it important?

We identifiy several implications, especially in the realm of public policy. This is important because as we look to the future, the imperatives of timely action and collective responsibility loom large, necessitating immediate policy adjustments and a robust research agenda to address the ongoing climate crisis.