ECB's Schnabel: Climate change is an existential threat with large downside tail risks.

Schnabel speaks on "The incorporation of environmental considerations in the supervision of prudential risks”

Climate-related and environmental risks (C&E risks) are now an important focal point for supervisors
Climate change constitutes an existential threat, implying large downside tail risks.
Dealing with financial risks is the core of prudential supervision
Physical climate risks tend to be correlated globally
The economic consequences of physical climate risks could be mitigated by closing the large climate insurance protection gap.
In the EU, only a quarter of losses caused by climate-related catastrophes are insured