Financial stability and sustainability
The Riksbank needs to understand and take account of sustainability issues if these affect the Riksbank’s work with financial stability. Here are examples of the Riksbank’s work on sustainability in financial stability.
The Riksbank’s practical work on safeguarding financial stability consists of several different tasks. One is working to prevent financial crises, among other means by identifying, analysing and overseeing risks and vulnerabilities in the financial system. Both of these risks include climate-related risks – physical risk and transition risk – that can create financial risks. If these are not managed, they can pose risks to the financial system, which can in turn have consequences for financial stability. It is therefore part of the Riksbank’s mandate to promote resilience to climate-related risks in the financial system.
The realisation that climate-related risks are a source of financial risks has deepened in recent years. The Riksbank participates in several international partnerships where concrete measures are prepared and adopted to strengthen the ability of the financial system also to manage climate-related risks. Examples of measures include stress tests based on different climate scenarios and contributions to recommendations and standards in the area. Through its membership in the Network for Greening the Financial System, a global partnership between central banks and supervisory authorities, the Riksbank makes an active contribution to strengthening the resilience of the international financial system. The Riksbank also participates in the Basel Committee to strengthen the resilience of the banking system and in the Committee on Payments and Market Infrastructures (CPMI) to strengthen the resilience of the financial infrastructure. Under the framework of the European Union, the Riksbank participates in working groups to develop measures and regulations on a European level.