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'Climate change' warning on banks' loans from Moody's

International credit rating agency Moody's warned about the impact of climate change, one of the determinants of economic activities, on bank credit quality.

'Climate change' warning on banks' loans from Moody's

Now, the financial world has realized the vital importance of environmental problems and has taken the "climate change" criterion to the agenda in their credit evaluations.

Moody's reported that climate change poses a major threat to banks' credit quality.

BANKS WILL ALSO EVALUATE THE PROJECTS OF THE LOANS OFFERED IN TERMS OF ENVIRONMENT

In the statement made by the credit rating agency, it was stated that banks are now increasingly turning to financing projects based on low carbon emissions in the loans they give.

In the statement, it was noted that climate change has a significant impact on the credit quality of banks, and the losses in the banking sector may be at a serious level depending on how climate change will occur and the policy to be implemented against it.

"DEVIORATION FROM THE PARIS AGREEMENT CAN CAUSE CREDIT LOSSES"

"Any deviation from the Paris agreement will result in higher loan losses for banks," Moody's said in a statement. evaluation was made.

"CREDIT LOSSES MAY BE APPROXIMATELY 20 PERCENT HIGHER IN THE EXTREME CLIMATE SCENARIO"

Moody's Senior Vice President Jorge R. Valez said: "Our analysis shows that climate risk is an important determinant of banks' credit quality and credibility. It also highlights some differences between banks in their vulnerability to various climate scenarios. Credit losses, the most extreme climate scenario, it could be about 20 percent higher." used the phrases.

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