Banks must consider climate-change impact on capital, liquidity, reputation, Basel committee says

Summary

MLex Summary: Banks must develop an understanding of climate risks, allocating responsibility to board members or committees, the Basel Committee on Banking Supervision has proposed. Lenders will need to assess the impact of rising temperatures or fossil-fuel phaseouts on the adequacy or their capital and liquidity provisions, looking at the risk of loan defaults, as well as the reputational and liability issues of being associated with polluting industries, said the consultation, which is open until February.