Legal & Regulatory News

The Basel Committee on Banking Supervisions publishes FAQs on climate-related financial risks

On 8 December 2022, the Basel Committee on Banking Supervision (BCBS) published a frequently asked questions document (the Document), identifying climate-related financial risks.

The Document was developed to provide clarification on how climate-related financial risks could be captured in the BCBS' Pillar 1 standards.

The questions and answers within the Document focus on the calculation of:

• the Risk-Weighted Assets (RWA) for credit risk, including for due diligence requirements, general corporate exposures and specialised lending;
• the RWA of operational risks;
• the RWA for market risks; and
• a climate adjusted Liquidity Coverage Ratio.

Click here to view the Document.