Webinar Replay: Banking System and the Risks of Climate Change

Dec 07, 2020 | Virtual (Online)

7 December 2020 - The Making Finance Work for Africa Partnership and the African Development Bank hosted a webinar entitled: "Banking System and the Risks of Climate Change"

Central banks and supervisory authorities play a key regulatory role. They are well placed to guide the banking sector towards supporting and implementing the low-carbon transition through the application of effective financial regulation and appropriate monetary policies. Climate change and climate policy can affect the balance sheets and business models of commercial banks in different ways. For example, if a financial institution has increased lending to sectors exposed to climate risk, climate policy decisions or technological advances may increase the risk that these credits will not be fully repaid.

International Financial institutions also have a major role to play in this transition. They need to adapt their interventions to these challenges of greening financial systems so that finance helps redirect financial flows to investments that contribute to a low-carbon economy. The international financial institutions role in helping developing countries green their financial systems can be multifaceted, by adapting their interventions. They provide financial support, most often in the form of loans, but sometimes in the form of large grants to help developing countries catch up in their development. This financial assistance can also support the transition of economies to low-carbon economies by helping the financial system change to develop green financial instruments.

The objectives of the seminar were:

  • Discussed the main climate-related risks that the banking system could face. These risks threaten the functioning of banking institutions as well as the stability of the financial system as a whole. African countries are particularly exposed as their economies tend to be more commodity-oriented and therefore sensitive to price fluctuations.
  • Discussed the role of different actors that need to respond to climate risks, particularly central banks; international financial institutions and the banking sector. Central banks can create an enabling environment for sustainable finance by imposing regulations and issuing guidelines. While the international financial institutions can help developing countries ; by adapting their interventions.

For more details on this session’s content, the event recording is available below. The webinar presentation can also be downloaded via this link.

Opening remarks 

Stefan Nalletamby
Director Financial Sector Development Department
African Development Bank

Moderator

Mohamed Kalif
Manager
Financial Intermediation & Inclusion Division
Financial Sector Development Department
African Development Bank

Speakers

Morgan Després
Deputy Head of the Financial Stability Department at Banque de France
Morgan Després is Deputy Head of the Financial Stability Department at Banque de France and also serves as the Head of the NGFS Secretariat. He joined the Banque de France in 2005 and served in the Payment and Settlement Systems Department and as deputy Head of the Macroprudential Division. Morgan holds a MBA from ESSEC business school,  graduated from the Institut d’Etudes Politiques de Paris and studied at the Harvard Extension School.

Mouhaouri Najwa
Head of the Green Finance Department, Bank Al-Maghrib
Najwa is the head of the green finance unit within the Banking Supervision Department of Bank Al-Maghrib. She has more than five years of experience in Banking supervision with the central bank of Morocco. Prior to this experience, she held the position of financial analyst in the investment banking field in Paris. Najwa holds a Master in International Financial Analysis from Neoma Business School, France.

Anthony Nyong
Director of Climate Change and Green Growth at the African Development Bank
Professor Anthony Nyong has about 30 years of experience in environmental and natural resources management, renewable energy and green growth. Positions he has held at the African Development Bank include Coordinator of the New Deal on Energy; Head of the Renewable Energy Flagship, Head of Gender, Climate Change and Sustainable Development Unit; and Head of the Compliance and Safeguards Division.  Mr. Nyong holds a Ph.D. in Geography from McMaster University, Canada and a D.Sc (hc) from the University of Calabar in Nigeria.