International Banking Regulation and Climate Change

39 Pages Posted: 5 Dec 2022 Last revised: 2 Mar 2023

See all articles by Kern Alexander

Kern Alexander

European University Institute and University of Zurich; EUSFIL Jean Monnet Centre of Excellence

Rosa M. Lastra

Centre for Commercial Law Studies, Queen Mary University of London

Date Written: December 1, 2022

Abstract

Climate change is a major threat to financial stability and requires financial institutions and the regulatory bodies that supervise them to put climate change at the core of their strategies and processes. The global climate crisis and the economy’s green transition are giving rise to new types of risks for banks. This paper analyses some of the key international bank regulatory standards, namely, disclosure, risk management, governance and regulatory capital. We develop the novel argument that these regulatory instruments should serve as a basis for developing more harmonised international bank supervisory standards to control the cross-border financial stability risks associated with climate change. International standard setting bodies have a role to play in promoting convergence in state regulatory practice to address climate financial risks. Accordingly, an international regulatory regime is required to coordinate the national regulatory practices of states so that they can most effectively address and control these risks.

Keywords: Banking regulation, Climate change, Financial stability, Bank governance, Environmental sustainability

JEL Classification: K23, F38, F42, F65

Suggested Citation

Alexander, Kern and Lastra, Rosa M., International Banking Regulation and Climate Change (December 1, 2022). Available at SSRN: https://ssrn.com/abstract=4290785 or http://dx.doi.org/10.2139/ssrn.4290785

Kern Alexander (Contact Author)

European University Institute and University of Zurich ( email )

Via dei Roccettini 9, San Domenico di Fiesole (FI)
Villa Schifanoia - Via Boccaccio 121, 50133 Firenz
Florence, 50133
Italy
+41 767797480 (Phone)

EUSFIL Jean Monnet Centre of Excellence ( email )

Italy

Rosa M. Lastra

Centre for Commercial Law Studies, Queen Mary University of London ( email )

67-69 Lincoln's Inn Fields
London, WC2 3JB
United Kingdom
+44 20 7882 8070 (Phone)
+44 20 8980 8101 (Fax)

HOME PAGE: http://www.law.qmul.ac.uk/staff/lastra.html

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
312
Abstract Views
1,206
Rank
182,746
PlumX Metrics