Assessing nature-related risks in the Hungarian financial system: Charting the impact of nature&apos;s financial echo

Riccardo Boffo; Hugh Miller; Gabriel Santos Carneiro; Gürcan Zeren Gülersoy

doi:https://doi.org/10.1787/24fd70e3-en

OECD Environment Working Papers

This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.

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- Environment

ISSN: 19970900 (online)
https://doi.org/10.1787/19970900

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Assessing nature-related risks in the Hungarian financial system

Charting the impact of nature's financial echo

This paper presents a technical assessment of nature-related risks within the Hungarian economy and financial system. The study draws upon the OECD Supervisory Framework to (i) prioritise various nature-related risks by conducting an impact and dependency assessment, identifying key economic sectors, and pinpointing the critical natural capital assets that are most crucial to the financial system; (ii) assess the direct and indirect economic impact of three exploratory scenarios on possible acute nature-related shocks using input-output analysis; (iii) explore the different financial risk channels through which economic risks stemming from nature-related losses may be transmitted within the Hungarian financial system; and (iv) provide supervisory recommendations based on the results.

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English

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- Environment
- Finance and Investment

Keywords: financial materiality, nature, nature-related risks, biodiversity, economics, finance and investment

JEL: E44: Macroeconomics and Monetary Economics / Money and Interest Rates / Financial Markets and the Macroeconomy; H63: Public Economics / National Budget, Deficit, and Debt / Debt; Debt Management; Sovereign Debt; E58: Macroeconomics and Monetary Economics / Monetary Policy, Central Banking, and the Supply of Money and Credit / Central Banks and Their Policies; C67: Mathematical and Quantitative Methods / Mathematical Methods; Programming Models; Mathematical and Simulation Modeling / Input-Output Models; G21: Financial Economics / Financial Institutions and Services / Banks; Depository Institutions; Micro Finance Institutions; Mortgages; Q20: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Renewable Resources and Conservation / Renewable Resources and Conservation: General; G14: Financial Economics / General Financial Markets / Information and Market Efficiency; Event Studies; Insider Trading

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