Climate change risk and cyber attacks could have “devastating” consequences for Australia’s financial system, the reserve bank has warned.
But in a speech to the Australasian Finance and Banking Conference online on Thursday, Jonathan Kearns, the RBA’s head of financial stability, said the climate risk to banks could be “managed” because they were less exposed than other sectors in a transition to a low emissions economy.
However, he warned that cyber attacks were now growing in frequency.
The speech comes ahead of the release of a report into the climate policies of banks and insurers from a controversial parliamentary inquiry pushed by Nationals MP George Christensen and the resources minister, Keith Pitt.
The banks fear the inquiry could result in mixed signals, with most regulators urging them to reduce their exposure to emissions intensive electricity sources, but some in the government wanting to force them not to “debank” fossil fuel companies or their enablers.
The banks told the inquiry they need to actively manage climate risk because governments and regulators require it, and because the investor community is “increasingly transitioning its focus towards…
