On Jun. 24, 2024, MLY CB published revised 2024 climate risk stress testing exercise methodology paper (version 2), which includes changes to part C1, table 3: summary of assumptions for long-term climate scenarios - portfolio coverage for banks.
In addition, to part 2C, chapter 15, paragraph 15.1 on exercise parameters for banks.
Plus, regarding part C2 - table 4: summary of assumptions for 1-year acute physical risk scenario - portfolio coverage for banks; and appendix 2, indicative list of sectoral breakdowns to include reference to paragraph 13.20 on assessment of counterparties.
The method paper is applicable to prescribed kinds of licensed banks, and others, including investment banks, licensed insurers including professional reinsurers.
Includes submission deadline i.e. by Jun. 30, 2025 (cohort 1) for domestic banking groups, selected locally incorporated foreign banks (LIFBs) and insurers and takaful operators’ (ITOs); other banks, development FIs (DFIs) and ITOs, by Dec. 31, 2025.
MLY CB also published Frequently asked questions (FAQs) on the climate risk stress testing methodology paper, which includes FAQs (general), FAQs on long-term adverse climate scenarios, as well as FAQs regarding short-term acute physical risk scenario.
Documents dated Jun. 24, 2024, received from MLY CB Jul. 19, summarized Jul. 23.
In Sep. 2024, MLY CB spoke with respect to climate risk stress testing, see #227354.
On Jun. 30, MLY CB consulted on climate risk stress testing exercise.
MLY CB issued a discussion paper (DP) on the 2024 climate risk stress testing exercise.
The discussion paper sets out MLY CB's proposed framework and elements for the industry-wide climate risk stress testing (CRST) exercise scheduled for 2024.
The paper outlines the applicability and format of the exercise, and technical elements such as scenarios selection, portfolio scope and granularity and other considerations.
All relevant parties, including financial institutions, non-financial corporates, industry associations, climate experts, government agencies, regulators and any other relevant organizations or individuals, are invited to provide written feedback on the proposals.
Including suggested areas to be improved/clarified or alternative proposals and issues.
Consultation End
Feedback should be submitted by Sep. 30, 2022; CRST exercise scheduled for 2024.
Feb. 2024 Methodology Paper
On Feb. 29, 2024, MLY CB issued the methodology paper on climate risk stress testing (CRST) on the expectations for financial industry-wide 2024 CRST exercise.
The CRST exercise aims to provide financial institutions with hands-on experience in quantifying climate risk, and refine their existing risk management strategies.
In addition, explore new approaches that are relevant for assessing climate risks.
Financial firms should also use it as an opportunity to identify current gaps, specifically those related to data, measurement, methodology, technology, and capabilities.
Jun. 2024 Revised Methodology Paper, FAQs
On Jun. 24, 2024, MLY CB published revised 2024 climate risk stress testing exercise methodology paper (version 2), which includes changes to part C1, table 3: summary of assumptions for long-term climate scenarios - portfolio coverage for banks.
In addition, to part 2C, chapter 15, paragraph 15.1 on exercise parameters for banks.
Plus, regarding part C2 - table 4: summary of assumptions for 1-year acute physical risk scenario - portfolio coverage for banks; and appendix 2, indicative list of sectoral breakdowns to include reference to paragraph 13.20 on assessment of counterparties.
The method paper is applicable to prescribed kinds of licensed banks, and others, including investment banks, licensed insurers including professional reinsurers.
Includes submission deadline i.e. by Jun. 30, 2025 (cohort 1) for domestic banking groups, selected locally incorporated foreign banks (LIFBs) and insurers and takaful operators’ (ITOs); other banks, development FIs (DFIs) and ITOs, by Dec. 31, 2025.
MLY CB also published Frequently asked questions (FAQs) on the climate risk stress testing methodology paper, which includes FAQs (general), FAQs on long-term adverse climate scenarios, as well as FAQs regarding short-term acute physical risk scenario.
Documents dated Jun. 24, 2024, received from MLY CB Jul. 19, summarized Jul. 23.
In Sep. 2024, MLY CB spoke with respect to climate risk stress testing, see #227354.
