ECB's Knot: Nature-Related Financial Risks Real and Urgent

7 September 2023

By Mariana Somensi – NICOSIA (Econostream) - European Central Bank Governing Council member Klaas Knot on Thursday warned central banks and supervisors that nature-related financial risks are real and require urgent action.


In a speech at an event to launch the conceptual framework developed by the Network for Greening the Financial System (NGFS), Knot, who heads De Nederlandsche Bank, said, ‘As central banks and supervisors, we have every reason to be concerned because it’s an illusion to think we can preserve financial stability if this degradation [of nature] continues’.


Financial institutions also contribute to the rapid degradation of ecosystems through the activities they finance, he noted.


‘Therefore it's squarely within our mandate to address these risks and to use our leverage to bend the curve’, he said.