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Central banks and policy institutions are increasingly relying on climate risk stress-testing methods to assess the financial sector's vulnerability to climate-related shocks. Six types of climate-related shocks, including abrupt transitions, gradual transitions, hot house worlds, climate-related disasters, 'green swan' events, and Minsky-type shocks, are identified as relevant for climate risk assessments. To improve these stress-testing methods, researchers suggest assessing more damaging scenarios and incorporating feedback loops between climate, economic, and financial systems.

Participants
  • Dirk Schoenmaker
    Role: Faculty
    Reference type: Co-written by
  • Mathijs van Dijk
    Role: Faculty
    Reference type: Co-written by
  • Henk Jan Reinders
    Role: PhD Candidate
    Reference type: Co-written by
Media Outlets
  • Naked Capitalism (Online)