ESMA LAUNCHES CALL FOR EVIDENCE ON CLIMATE RISK STRESS TESTING FOR CCPS

(Source: ESMA)

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a call for evidence on the methodology to assess climate risk with a new stress testing framework for Central Counterparties (CCPs).

ESMA, to support the EU’s efforts in improving the financial sector’s resilience and contribution to sustainability, has started developing a climate risk stress testing framework tailored to the specificities of CCPs.

The call for evidence seeks stakeholders’ views on:

a proposed classification of climate risks relevant to CCPs;

the methodology to build an EU-wide climate risk stress testing framework for CCPs;

how to best calibrate this stress test; and

the current development of climate risk assessments by CCPs.

Climate change and the financial risks that come with it have, in recent times, encouraged policy makers and the financial services industry to consider the integration of environmental factors into their risk frameworks.

Next steps

We invite stakeholders, in particular professionals employed by clearing service providers and their members and counterparties, trade associations representing them, as well as professionals with climate risk expertise, to provide comments by 19 April 2022.

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