Some euro zone banks may be fined after missing ECB climate goal
Some euro zone banks have fallen short of the European Central Bank’s climate-related goals and may face fines, a senior ECB supervisor said in an interview published on Wednesday.
The ECB has handed banks a list of deadlines for factoring in risks relating to climate change, from floods and droughts to a transition to new energy sources, into the way they do business.
But some banks have fallen behind schedule, Kerstin af Jochnick, a member of the ECB’s Supervisory Board, told Spanish newspaper Cinco Dias.
“We have notified a few banks that, based on our current assessment, they have not met the interim milestones, which means they face the prospect of having to pay a so-called pecuniary penalty,” af Jochnick said.
The ECB can fine banks up to 5% of their daily turnover until the issue is resolved or for up to six months. Banks have the right to be heard before any fine, known as “periodic penalty payment” in ECB speak, is enforced.
“Supervisors will need to assess the documents that banks submit and the total number of days that they might have failed to comply past the deadlines we gave them,” af Jochnick said. “This will form the basis for any potential penalty, which would need to be decided upon by the Supervisory Board. So it’s a process that is not over yet.”
The ECB has been putting pressure on laggards for over a year- to some effect.
The ECB’s top supervisor, Claudia Buch, said on Tuesday “almost all banks” had acknowledged they faced material financial risks from climate change and were “adjusting their risk management step by step”.
The ECB, which oversees euro zone’s large banks and sets monetary policy for the area is widely expected to start cutting interest rates on Thursday, in a sign that it its battle against high inflation is nearing an end.
Source: Reuters
