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dc.titleEnvironmental Financial Risks: A Central Banking Perspective
dc.contributor.authorAguirre, Horacio
dc.contributor.authorAguirre, Kamila
dc.contributor.authorBelfiori, Maria Elisa
dc.contributor.authorDe la Puente Alvarez, Maria Victoria
dc.contributor.authorRodríguez-Novoa, Daniela
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageArgentina
dc.coverageEcuador
dc.coverageColombia
dc.coverageLatin America
dc.coverageThe Caribbean
dc.date.available2026-09-30T00:09:00
dc.date.issue2026-09-30T00:09:00
dc.description.abstractThis paper examines the implications of environmental physical and transition risks for central banks in Latin America and the Caribbean. It reviews the evidence showing that droughts, floods, and other weather-related shocks, as well as risks associated with the transition to a low-carbon economy, can affect inflation, borrower repayment capacity, credit supply, and financial stability. Drawing on international experience, it discusses how central banks have incorporated these risks into stress-testing frameworks, disclosure requirements, and monetary policy operations. It also presents recent research conducted by the central banks of Argentina, Colombia, and Ecuador, illustrating how environmental risks can be integrated into existing analytical tools through credit-risk analysis, exposure mapping, and inflation dynamics. The main conclusion is that central banks do not require entirely new policy frameworks to address these challenges. Instead, existing tools can be adapted to improve risk assessment and strengthen resilience while remaining aligned with traditional mandates focused on price stability and financial stability.
dc.format.extent37
dc.identifier.doihttp://dx.doi.org/10.18235/0014546
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Environmental-Financial-Risks-A-Central-Banking-Perspective.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectFinancial Risk
dc.subjectDrought
dc.subjectSmall Business
dc.subjectSmall Business Financing
dc.subjectBank Loan
dc.subject.jelcodeE30 - Prices, Business Fluctuations, and Cycles: General
dc.subject.jelcodeE52 - Monetary Policy
dc.subject.jelcodeE58 - Central Banks and Their Policies
dc.subject.jelcodeG20 - Financial Institutions and Services: General
dc.subject.jelcodeQ54 - Climate • Natural Disasters and Their Management • Global Warming
dc.subject.jelcodeQ58 - Government Policy
dc.subject.keywordsphysical risks;transition risks;central banks;Financial stability;Monetary policy;Inflation;Stress testing;Latin America and the Caribbean
dc.typeCatalogs and Brochures
idb.identifier.pubnumberIDB-CB-01238
idb.operationRG-T4390
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