The International Monetary Fund (IMF) has said that with the appropriate resources, governments can assist in reducing the risks associated with climate change that affect Economies and financial systems.
In a report issued on Wednesday, the fund said that when it comes to the disastrous effects of climate change, most people consider the harm done to lives and livelihoods.
Read also: French climate activists protest over climate crimes
“Yet the effects of more frequent and extreme weather are just as consequential for the health of financial systems,”it said. “The physical impacts of climate-related shocks, such as hurricane damage to power grids, affect financial institutions and how they make decisions,”.
The Fund further stated that in order for banks, insurers, and other players in the financial industry to manage climate risks in their operations and balance sheets, they need the right instruments.
“At the same time, as financial supervisors monitor the resilience of the system, they need tools to adequately assess and supervise these risks,” it added.
Story was adapted from The Nation.
