Japanese regulator the Financial Services Agency (JFSA) is preparing for a climate scenario analysis and stress testing pilot covering the country’s five biggest banks, RI has learned.
The banks will share their loan book data with the JFSA, which will then conduct a two-part climate scenario analysis and stress test exercise.
In collaboration with thinktank the 2 Degrees Investing Initiative (2dii), the country’s financial regulator is expected to publish the results of the analysis in the first quarter of next year – although what exactly will be published is yet to be confirmed.
The work had been slated for completion during 2020, but saw delays as a result of the Coronavirus pandemic.
The process will use 2dii’s Paris Alignment Capital Transition Assessment (PACTA) climate scenario analysis models before using a simplified climate stress test. The scenarios published earlier this year by the Network of Central Banks and Supervisors f…