Lars Rohde: The impact of climate change on financial stability and the need for a European banking union

Speech by Mr Lars Rohde, Governor of the National Bank of Denmark, at the annual meeting of Finance Denmark, Copenhagen, 2 December 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me to speak here today.

I would like to start by talking about a topic that is high on the global agenda right now: climate change.

While there is considerable uncertainty as to what will happen, there is little doubt by now that climate change will have major implications for large parts of our society.

It has become clear that political actions are required in order to halt the negative developments. A higher price for CO2, so that it reflects the costs of carbon emissions, is the cheapest and most effective approach.

Climate change is a shared and global challenge. Consequently, stronger international cooperation is important.

But it is also important that we all learn more about how climate change can affect the economy and the financial sector. That is why a growing number of central banks have begun to look at climate change in relation to their core tasks.