G20 watchdog says bank climate stress tests may understate exposures

FILE PHOTO: General view as lightning strikes over the city of London, Britain May 26, 2018. REUTERS/Tom Jacobs

LONDON (Reuters) - Climate-related stress tests for banks need to better capture the indirect fallout of climate change on lenders and the wider global economy, the G20's Financial Stability Board said on Tuesday.

The European Central Bank, Bank of England and other central banks have completed an initial batch of experimental stress tests to assess how banks will cope with the impact of climate change on their business.