Climate-Related and Environmental Risks for the Banking Sector in Latin America and the Caribbean

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dc.creatorCalice, Pietro
dc.creatorMiguel, Faruk
dc.date2021-06-17T15:35:59Z
dc.date2021-06-17T15:35:59Z
dc.date2021-06
dc.date.accessioned2026-07-01T00:35:50Z
dc.descriptionThere is increasing recognition that climate-related and environmental risks are a source of financial risks. Using publicly available data, this paper attempts a preliminary estimation of the physical and transition risks for the banking sector in a sample of economies in Latin America and the Caribbean. The results show that exposure to floods, compounded by high loan concentration in and around countries’ capital cities, represents the most important source of credit risk for the banking sector. After large-scale natural disasters, banks’ nonperforming loans increase by up to 1.4 percentage points in affected provinces. The results also show that banks in the region are exposed to transition risks, especially in Argentina, Bolivia, Paraguay, and Uruguay, due to their high lending to the agriculture sector, which is the largest emitter of greenhouse gases in the countries. Firms operating in transition-sensitive sectors already present signs of financial stress, especially those in the fossil fuel and agriculture sectors. Overall, the results demonstrate the importance for financial authorities in the region to advance in the integration of climate-related and environmental risks in their work.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/265231623356999217/Climate-Related-and-Environmental-Risks-for-the-Banking-Sector-in-Latin-America-and-the-Caribbean-A-Preliminary-Assessment
dc.identifierhttps://hdl.handle.net/10986/35764
dc.identifierhttps://doi.org/10.1596/1813-9450-9694
dc.identifier.urihttp://hdl.handle.net/123456789/406964
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 9694
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.rightsWorld Bank
dc.subjectENVIRONMENTAL SUSTAINABILITY
dc.subjectCLIMATE CHANGE
dc.subjectBANKING SECTOR
dc.subjectRISK
dc.subjectFINANCIAL STABILITY
dc.subjectNATURAL DISASTER
dc.subjectFLOOD RISK
dc.subjectCREDIT RISK
dc.subjectGREENHOUSE GAS EMISSIONS
dc.titleClimate-Related and Environmental Risks for the Banking Sector in Latin America and the Caribbean
dc.titleA Preliminary Assessment
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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