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ECB Has Banks Bracing for Capital Hit as Climate Risk Tested

  • ECB climate test seen as gateway to higher capital charges
  • Some lenders argue climate risks already being dealt with
Updated on

European banks are concerned that their top regulator will use its upcoming climate stress test to raise the bar for capital.

The mass of data banks must soon submit to the European Central Bank could be used to justify higher capital requirements as soon as next year, according to lobbyists representing the industry. Efforts to get clarity from the ECB have been met with a degree of evasiveness, which adds to the level of anxiety, the people said, asking not to be identified discussing private talks.