Climate-resilient Financial Sector: Climate Scenario Analysis Exercise

Climate scenario analysis remains an important forward-looking tool for central banks, supervisors and financial institutions to assess the potential implications of climate change on the financial system. Since 2018, the Monetary Authority of Singapore (MAS) has conducted climate scenario analysis exercises and integrated them into its regular assessment of financial stability.

MAS has been engaging financial institutions (FIs) on their plans to address key data and methodological gaps to ensure that they continue to enhance their climate scenario analysis capabilities.

In addition, MAS worked with consultants and FIs to conduct a top-down scenario analysis to assess the potential financial impact of climate transition risks over the period 2023 to 2030. Results of this analysis were published in the Financial Stability Review 2023.

MAS is currently collaborating with FIs to conduct a climate scenario analysis exercise to assess their vulnerabilities to climate physical risks and strengthen their physical risk assessment capabilities.