Skopje, 13 December 2023

The banking system will play an important role in the process of transition of the domestic economy to the new model of sustainable growth. However, the climate change is also a source of risks for the financial sector. The activities of the central banks are mainly directed towards building resilience of the banking system to climate change risks, thus facilitating the transition to green economy, Frosina Celeska,  Manager of the Banking Regulation and Bank Resolution Department said at the panel discussion within the Second ECG Conference organized by the US Chamber of Commerce (AmCham). 

Celeska emphasized that the National Bank fully recognizes the importance of climate risks, settings the activities related to climate change as a strategic priority since 2020. For this purpose, the National Bank have undertaken several activities in the past period, such as becoming a member in the International Network for Greening the Financial System (a global network of central banks and supervisory authorities for sharing best practices), then membership in the Vienna Climate Change Initiative, the implementation of the Climate Change Survey of all banks and savings houses in the country. Other activities include publication of data on the so-called "green loans", the change in the reserve requirement instrument for banks to encourage "green" lending and the regulatory requirements through the Decision on the methodology  for credit risk management (which introduced a requirement for banks to incorporate the risks related to climate change in managing the credit risk) and the Decision on reports and data disclosure by banks, related to the regular publication of data and information on exposure to risks related to climate change and ESG risks.

With the adoption of the Mid-Term Plan for the period 2023 - 2025, the National Bank established a comprehensive, systematic and consistent framework for managing climate change risks through the prism of the central bank. The plan, among other things, foresees activities for altering the supervisory approach, with the gradual inclusion of climate risks in the assessment of the banks' risk profile, emphasizing also the importance of coordinating activities in the country and the need for cooperation with other state institutions and authorities. "The implementation of the Medium-Term Plan will contribute to a better understanding of climate risks, their incorporation in the analyzes of the banking system and monetary policy, and building a resilient banking system capable to underpin the transition of the economy to green and sustainable development," concludes Celeska.