(Adds more detail)
LONDON, Oct 28 (Reuters) - The Bank of England said on
Thursday it will study whether banks and insurers need to hold
capital specifically to cover their exposures to climate change
- and crack the whip if there is too little progress in managing
environmental risks.
"This work will help determine whether changes to the
design, use or calibration of the regulatory capital framework
may also be needed to ensure resilience against these risks,"
the BoE's Prudential Regulation Authority said in a statement.
"We will provide an update on our approach in 2022 following
a call for further research and a conference on climate change
and capital requirements."
The BoE said in 2019 that banks and insurers should set out
by the end of 2021 how they manage risks from climate change and
disclose them.
The Bank said in a report on Thursday that the firms it
regulates have made "tangible progress" in meeting these
expectations, but some are materially more advanced than others,
and signalled a shift in gears in how it supervises this.
"As we move into 2022, the PRA will actively supervise to
ensure firms meet expectations, with firms needing to
demonstrate a good understanding and management of
climate-related financial risks on an ongoing basis," it said.
"In the report we highlight that we will consider the use of
our full supervisory and regulatory toolkit to provide the
necessary assurance or remediation where appropriate."
(Reporting by Huw Jones; Editing by Ana Nicolaci da Costa and
Mark Potter)