{"id":569837,"date":"2026-08-01T05:18:13","date_gmt":"2026-08-01T05:18:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/569837\/"},"modified":"2026-08-01T05:18:13","modified_gmt":"2026-08-01T05:18:13","slug":"ecb-official-warns-climate-crisis-poses-growing-threat-to-core-financial-stability-economics","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/569837\/","title":{"rendered":"ECB official warns climate crisis poses growing threat to \u2018core financial stability\u2019 | Economics"},"content":{"rendered":"

A senior policymaker at the European Central Bank<\/a> has said the climate emergency and the breakdown of nature poses a dramatically growing risk to the global economy.<\/p>\n

Frank Elderson, a member of the ECB\u2019s executive board, said the eurozone lender of last resort was stepping up its monitoring of the financial risks linked to the destruction of \u201cecosystem services\u201d, which are nature-related processes or assets that support human activity.<\/p>\n

\u201cThese services are not stable but they are in rapid decline. That\u2019s why we talk about the climate and nature crises,\u201d he said. \u201cSo knowing that dependency, and knowing those exposures by the banks, we come to the conclusion that this is relevant.\u201d<\/p>\n

Across France and Spain, wildfires have raged amid record-breaking temperatures<\/a>, torching land, businesses and homes, in an emergency that will carry a heavy economic cost beside the direct human toll.<\/p>\n

In an interview with the Guardian before the current devastation across Europe<\/a>, Elderson said it was clear the rising frequency of natural disasters linked to global heating pos a threat to financial stability.<\/p>\n

He said more work needed to be done to assess the risk from the collapse of ecosystem services, as reliance on nature was more complicated to map than the impact of a single extreme weather event.<\/p>\n

Ecosystem services are defined as any benefit that can be drawn from a natural structure or process \u2013 for example, water can be used as a raw material, an energy source through hydropower, or for transportation. It is also a habitat for marine life critical for food production, and a basis for recreational services.<\/p>\n

\u201cNature-related risks can pose material economic and financial risks, including through their impacts on credit risk, growth, inflation and \u2013 over the long-term \u2013 potential financial instability,\u201d Elderson said.<\/p>\n

\u201cI did interviews [previously] saying, you know, if you destroy nature, you destroy the core on which our economies depend. And that got people\u2019s attention. This is not some kind of a flower-power, tree-hugging exercise. This is core economics. This is core financial stability, core price stability.\u201d<\/p>\n

As the supervisor responsible for Europe\u2019s largest banks, the ECB has launched a programme of work to assess how the escalating damage to ecosystem services could expose the financial system to risk.<\/p>\n

The central bank plans to publish analysis later this year investigating how \u201cecosystem degradation pathways\u201d could translate into credit loss dynamics for the eurozone\u2019s banks.<\/p>\n

A Dutch lawyer and central banker, Elderson was instrumental in the creation of the Network for Greening the Financial System<\/a> (NGFS) in 2017, alongside Mark Carney and Fran\u00e7ois Villeroy de Galhau, the then chiefs of the Bank of England and Banque de France. He served as founding chair of the group of 114 global central banks and financial supervisors pushing to develop climate risk management.<\/p>\n

The green agenda in financial services has faced pushback under the US presidency of Donald Trump, as some businesses battle to remain engaged in the fossil-fuel economy.<\/p>\n

Trump pulled the US out of the NGFS last year, leaving Europe to take the lead on climate-related risks without the involvement of the world\u2019s most powerful economy.<\/p>\n

Elderson said the banking industry remained convinced that climate and nature-related risks had to be addressed.<\/p>\n

\u201cI would think it\u2019s very difficult to find a bank in Europe that will honestly tell you that they think this is not relevant,\u201d he said. \u201cI think that time has passed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A senior policymaker at the European Central Bank has said the climate emergency and the breakdown of nature…\n","protected":false},"author":2,"featured_media":569838,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46],"class_list":["post-569837","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/569837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=569837"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/569837\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/569838"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=569837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=569837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=569837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}