The ECB published the results of its first climate stress test in early July. It is an experimental exercise that aims to draw lessons learned for banks and the regulator in the areas of climate risk management, data infrastructure and modeling of transition risks and physical risks. During the session we will carry out a strategic analysis of the main results, discuss lessons learned and comment on banks’ future response priorities to mitigate the challenges identified.

Financial institutions face major social and economic challenges, and the continued presence of the current pandemic poses a level of uncertainty not seen before, even for well-capitalized and profitable banks as they seek to adapt to this “new normal”.

Despite these challenges, banks must continue to re-evaluate their liquidity risk measurement capabilities and make sure they have a sound framework for liquidity monitoring, data management and stress testing, as defined by regulation.