Risks rising for Asian banks from climate change

As extreme storms once again wreak havoc across Asia Pacific Apac, banks are assessing how these risks are playing out for their exposures and how so called silent’ credit risk could be building up.

In early September, Super Typhoon Yagi caused billions of dollars of economic losses and cost hundreds of lives across Hainan, Guandong, the Philippines, Vietnam, Myanmar, and to a lesser extent Hong Kong. With the insurance gap still large across the region, banks need to understand how climate change makes their lending more risky. While banks are currently protected from most extreme weather events by reinsurance, if insurance become more expensive or harder to access,...