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Climate Stress Test of the Hungarian Banking System

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  • Laszlo Bokor

    (Magyar Nemzeti Bank (the Central Bank of Hungary))

Abstract

This paper presents the pilot top-down climate stress test of the Hungarian banking system over the 2020-2050 horizon. The focus is on a core indicator of financial soundness, the ratio of non-performing loans. Three scenarios are considered with different grades of compliance with the Paris Agreement. Results show that, by 2050, the sectoral excess ratios of non-compliance are scattering from 0 to 19 percentage points.

Suggested Citation

  • Laszlo Bokor, 2022. "Climate Stress Test of the Hungarian Banking System," MNB Occasional Papers 2022/147, Magyar Nemzeti Bank (Central Bank of Hungary).
    • Handle: RePEc:mnb:opaper:2022/147
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    File URL: https://www.mnb.hu/letoltes/mnb-op-147-final-1.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    climate stress test; banking system; non-performing loans; sectoral granularity;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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