ECB's Elderson: Banks And Supervisors Must Move Beyond Traditional Data-Driven Risk Models To Address Non-Linear Climate And Nature Risks

Known Climate Risks Increasingly Measurable; Banks Face Known Unknowns Such As Tipping Points And Radical Uncertainty From Unknown Unknowns - Scenarios Needed To Explore Plausible Futures And Build Proactive Resilience - Challenges Extend To Demographics, AI And Quantum Computing, With Heightened Uncertainty Demanding Upscaled Risk Management Frameworks