The E-axes Forum on Climate Change, Macroeconomics, and Finance

Climate Risks in Financial Markets

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Nicolò Florenzio

Research Associate, E-axes Forum

Climate change has a destabilizing effect on financial markets that are subject to both physical risks and transition risks. If market actors fail to assess these risks, the financial sector will become increasingly overexposed to climate sensitive assets and vulnerable to climate shocks. The ensuing market failure provides the justification for central bank intervention in order to prevent cascading and adverse financial effects.

This is a brief based on a series of webinars we organized from February 14, 2022 to March
14, 2022.

Climate Finance” – Stefano Giglio, Yale School of Management.

Achievements and Challenges in the ESG Markets” – Michela Scatigna, Bank for International Settlements, and Omar Zulaica, Bank for International Settlements.

Climate risks in financial markets” – a high-level panel discussion with Irene Monasterolo, EDHEC Business School, Sujit Kapadia, European Central Bank, and William Oman, International Monetary Fund.

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