Challenges of managing banking risks in Light of emerging environmental risks

Abstract

The study aimed to clarify the relationship between environmental risks (natural disasters and climate change) and the banking sector, as these risks affect the financial sector and are transmitted to it through several channels, to cause various financial and bank market and operational credit risks, which can be managed by taking them into account and finding ways to measure them. One of the most important findings of this research is that environmental risks lead to systemic financial risks that central and supervisory authorities must provide mechanisms and means to manage them. Forecasting them for mitigation and adaptation, conducting and analyzing scenarios of stressful situations, forming specialized committees in managing banking risks resulting from climate change, encouraging local and international cooperation, and benefiting from various field experiences in this field.