The Relation between Climate Risk and The Level of Banking Risk, with Particular Emphasis on Credit Risk

Climate change and its consequences, e.g. in the form of severe weather phenomena, are creating more and more problems for continents, countries, businesses, insurers and generally the population. Banks are also affected by their influence, which means that it is necessary to take into account climate risk in the banking risk management process. Climate risk also affects the size of other types of banking risk, being correlated with tchem. Among them, there is credit risk. Therefore, the authors decided to investigate this problem in more detail, hence the aim of the article is to show the importance of including climate risk in the banking risk management system, including the bank’s credit procedure, while taking into account the impact of climate risk on the bank’s capital requirements.