ECB's Elderson: Banks Could Face Penalties for Failing to Manage Climate Risks
20 September 2023
By Mariana Somensi – NICOSIA (Econostream) - European Central Bank Executive Board member Frank Elderson on Wednesday said that banks that failed to manage their climate and environmental risks could be subject to penalties.
In a speech at the Springtij Forum 2023 in the Netherlands, Elderson stated, ‘By the end of 2024 all banks under our supervision must fulfil these [climate and environmental risk management] expectations, and we have also set intermediate deadlines’.
‘We stand ready to enforce these deadlines with all the instruments at our disposal, including imposing periodic penalty payments’, he added.
The delay in the climate transition is ‘expensive’ and ‘disastrous’, he stressed. ‘[C]entral banks and supervisors that continue to neglect these [climate and ecological] crises fail to fulfil their mandates.’
‘So far we are doing too little. And what we are doing, we’re doing too slowly’, he said. ‘There is no limit to what we can all contribute.’