EU Friday – 19 June
Welcome to Better Europe's weekly update on EU Affairs. IF BANK STRESS TEST FAILS, WHO WILL PAY FOR CLIMATE RISK? The European Banking Authority is finally stress-testing banks on climate risk. For the first time in history, climate risk is explicitly included in the next test, designed for 2027. But the biggest question is not whether the banks will pass, but whether the system will hold, and whether taxpayers will end up chipping in if it doesn’t. To the relief of the simplification ayatollahs, the EBA’s new methodology cuts data requirements by 55%. But the real novelty is the inclusion of transition and physical climate risks, even if they are only in a dedicated module without impacting the core results. As of next year, banks will have to test how…
