Category: Central banks
EIOPA works with academics on ground-breaking new paper EIOPA works with academics on ground-breaking new paper EIOPA works with academics on ground-breaking new paper
Fossil fuel exposure and low-carbon transition readiness can “considerably affect the fiscal and financial risk position” of countries, according to a new paper on European insurers’ sovereign debt holdings by the European insurance and pension supervisor, EIOPA, in collaboration with leading academics.
The joint paper ‘Climate Risk Assessment of the Sovereign Bond Portfolio of European Insurers’, which does not reflect the supervisor’s official position, was published last month as part of its Financial Stability Risk Report.
It is claimed to be the first collaboration between financial regulators, climate economists and climate financial risk modellers and is also believed to be the first paper to assess climate-related financial risks stemming from insurance companies’ exposures to sovereign bonds.
The paper assesses the impact of disorderly transition scenarios and their accompanying “shocks” on European insurers’ sovereign bond portf…