The European Commission will review banks’ capital requirements to encourage them to invest in the low-carbon transition as part of a new set of rules to be tabled by June 2020.
“We would welcome [stakeholders’] views on how the prudential framework can better reflect the risks associated with climate and other environmental factors,” said EU finance commissioner Valdis Dombrovskis at a conference on the Basel III reforms.
Prudential rules – meant to ensure that banks have sufficient resources to remain financially viable and resilient to financial shocks – “could favour ‘green’ investments and loans naturally”, said Dombrovskis, who will carry on with the same portfolio in the incoming Commission.
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