Bangladesh: Technical Assistance Report-Report on Climate Risk Analysis

May 17, 2024

Preview Citation

Format: Chicago

Bangladesh: Technical Assistance Report-Report on Climate Risk Analysis, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Summary

A Technical Assistance (TA) mission was conducted in Dhaka, Bangladesh, from March 5 to 9, 2023, to assist authorities in setting up a framework to assess physical climate risk in the financial system. The TA mission focused on (i) proposing a risk assessment framework tailored to available data, with a focus on the impact of floods on the banking sector, (ii) taking stock of financial and climate data availability and identifying data gaps, (iii) setting up collaboration and data sharing mechanisms, taking into account legal obligations and confidentiality constraints, between multiple agencies. The mission identified the main climate and financial data sources and existing data gaps, proposing a preferred micro approach for climate risk assessment based on high-granularity data and two alternative options relying on more aggregate data. The micro approach is a borrower-level assessment based on geo-located bank exposure data; the alternatives rely on lower granularity or country-level exposures, possibly resulting in estimates that might be of lower precision and output of lower quality. The choice of framework should aim to strike the right balance between timeliness and quality of the analysis.

Subject: Climate change, Environment, Financial sector policy and analysis, International organization, Macroprudential stress testing, Monetary policy, Natural disasters, Solvency stress testing

Keywords: Climate change, Climate risk analysis TA, Global, Macroprudential stress testing, MCM Department, Ministry of water resource, Mr. sardar Udoy Raihan, Natural disasters, Solvency stress testing, TA mission, World Bank staff

Publication Details

Pages:

17
Volume:

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DOI:

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Issue:

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Series:

Technical Assistance Report No. 2024/039
Stock No:

TAREA2024039
ISBN:

9798400275371
ISSN:

3005-4575

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