Default risk set to rise from climate inaction – ECB

‘Hothouse world’ scenario could see average probability of default increase significantly more than under both orderly or belated transition

The probability of default (PD) for the average eurozone bank’s corporate loan book could be 7.1% higher by mid-century if governments don’t act expeditiously to mitigate climate change, research from the European Central Bank (ECB) found.

In a ‘hothouse world’ scenario where no regulatory or policy action is taken to mitigate climate risk, the average corporate loan portfolio PD would initially drift up to 1.5% lower than in the baseline ‘orderly transition’ scenario, as companies forgo green

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here