CIMA warns of financial danger linked to local weather

CIMA warns of economic risk linked to climate


(CNS): Climate change is expected to increase risks within the financial system in many ways, the Cayman Islands Monetary Authority said in a report assessing the stability of the local economy and salient trends. Local institutions face acute and chronic climate-related risks potentially causing “dire economic consequences”, CIMA warned, as the regulator seeks ways to regulate how institutions manage that risk.

In the first edition of the Cayman Islands Financial Stability Report, CIMA sought to shed light on the performance of the major sectors across the Cayman economy and examine future threats to the financial industry.

Included in the report is an assessment of the potential impact of climate change and how institutions and the regulator could tackle a warming planet and the economic consequences. All financial institutions, including banks, are exposed to climate-related risks that could affect their safety and soundness as well as have broader financial…