Regulatory Alerts2025-10-27
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Good practices on climate risk management
The Hong Kong Monetary Authority issued this circular to share good practices and key observations regarding Authorized Institutions' climate risk management frameworks based on recent supervisory exercises. The document highlights three critical areas for improvement: advancing quantitative-oriented frameworks with stress testing, bridging data gaps to incorporate climate risks into credit decisions, and deepening the embedment of climate considerations into traditional risk types. Institutions are encouraged to refer to these identified good practices to enhance their own climate risk management capabilities.
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