On July 30th, ISDA and IIF responded to the PRA consultation (CP10/25) on enhancing banks’ and insurers’ approaches to managing climate-related risks, which proposes updates to the Supervisory Statement 3/19 on climate-related risk management for banks and insurers.
ISDA and IIF broadly support the PRA’s climate risk approach, but we warn against overly prescriptive or bespoke climate-specific requirements.
A key theme in the industry response is integrating climate risk into existing risk frameworks rather than creating standalone processes. We also call for flexibility in governance, scenario analysis, reverse stress testing, and data expectations, especially to accommodate diverse business models and international firms. Alignment with global standards and practical implementation are also of paramount importance as the PRA finalizes its supervisory statement on climate-related risk management.
Documents (1) for ISDA/IIF Responds to the PRA Consultation (CP10/25) on Enhancing Banks’ and Insurers’ Approaches to Managing Climate-Related Risks
Latest
Expanding the Universe of Eligible VM
ISDA conducted a series of interviews with buy- and sell-side firms to understand the drivers of a growing use of non-cash assets as variation margin (VM) for non-cleared over-the-counter (OTC) derivatives and the barriers that remain to expanding the use...
ISDA Response on Hedge Accounting Guidance
On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...
Joint Response to EBA Consultation
On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act under Article 8 of...
Response to JSCC on Clearing Fund Consolidation
On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...