The US CFTC issued a first-of-its-kind report yesterday on the impact of climate change to financial markets. The document says that climate change poses direct risks to credit, investments and security prices. The timing of each transition will differ by product and region, referred to in the report as “sub-systemic shocks”, which will force repricings of risk assets. We join others in our surprise that this report has seen the light of day. Its recommendations, while mostly not new, should be closely considered.
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