As climate change risks increase worldwide, company boards will be critical in ensuring their firms remain resilient and on a path to carbon neutrality. Developed through insights from 50 top financial institutions, this collaborative report from GARP and the United Nations Environment Programme Finance Initiative (UNEP FI) provides banks with a comprehensive framework for establishing a board-level climate dashboard that can be used to report decision-useful climate information and metrics.
In this paper, GARP Risk Institute highlights the best practices implemented by climate risk management leaders and outlines the steps others can take to join them. The study captures the key dimensions of firms’ climate risk management including governance; strategy for dealing with actual and potential climate risks; metrics, targets, and limits used to assess and manage climate risks and opportunities; and more.
GARP Risk Institute recently completed its third annual Global Survey of Climate Risk Management at Financial Firms. The results detailed in this independent, comprehensive report are an eye-opening look at how financial institutions seek to measure and manage both the financial risks and opportunities associated with climate change through the lens of governance, strategy, risk management, metrics, scenario analysis and disclosures.
Digital currencies pose risks to financial institutions, nonfinancial firms, investors and others. This primer introduces cryptocurrencies (such as Bitcoin), stablecoins (such as Tether) and central bank digital currencies, and offers a practical breakdown of both the familiar and unfamiliar risks they present.
Leveraged loans are on track to be the next subprime, imposing large losses on lenders and the economy and destabilizing the financial system. Understanding the players, the instruments and the history behind this highly-complex market is vital to limiting the risks. Each of the four articles in this series offers a unique perspective.
Three distinct points of view are presented on turning lessons learned from failures into the building blocks of an organization's resilience. These include a review of cross-industry insights, guidelines for effective incident reporting and perspective on the connection between culture and misconduct. As threats have grown increasingly complex, firms must anticipate, prepare for and learn from operational failure.
The quality of supervisory stress tests could be significantly improved through international agreement on a common framework. While not all aspects of stress testing should necessarily be harmonized, there are elements that would benefit both supervisors and banks, reducing the costs involved, improving the quality of the outputs and making the Basel Principles on Stress Testing more achievable.
The number of models used by financial firms has risen significantly. This reflects many factors, such as regulatory requirements and the opportunities offered by advanced analytics to improve firms’ performance. Models are used to address a wide range of issues, from meeting regulatory requirements to identifying potential new customers and more.
Jo Paisely’s career began at the Bank of England where she worked in various economist roles, ran the Statistics Division and spent the last part of her career in Supervision.