Euro zone banks should be legally bound to climate transition plans, ECB says By Reuters

FRANKFURT (Reuters) – Euro zone banks needs to be legally sure to undertake plans that spell out how they’ll mitigate their publicity to climate-related dangers over the subsequent 30 years, European Central Financial institution board member Frank Elderson mentioned on Wednesday.

The ECB is placing pressures on the 114 banks on its watch to deal with dangers stemming from local weather change – akin to climate hazards and new guidelines aimed toward limiting emissions – by way of stress exams and requests for disclosure.

Elderson, a Dutch lawyer who represents the ECB’s supervisory arm on the Government Board, mentioned banks needs to be mandated to sort out climate-related dangers or could by no means make good on their “lofty intentions”.

“Solely by introducing obligatory transition plans can banks’ lofty intentions for the subsequent 30 years be was concrete actions now,” Elderson advised an occasion organised by Austria’s monetary regulator.

The ECB’s powers as supervisor are constrained by European and nationwide legal guidelines. This has landed it in sizzling water previously, for instance when it sought to power banks to dump unhealthy loans sooner and confronted pushback from members of the European Parliament for encroaching on their prerogatives.