Stress test disruptive energy transition
DNB has developed a targeted stress test to gain insight into the possible impact of a disruptive energy transition on the financial sector of the Netherlands. The stress test is described in Chapter 4 of the
Fall 2018 Financial Stability Overview
On the basis of four stress scenarios involving policy and technology shocks, the stress test investigates how financial institutions might be affected. The results suggest that a disruptive energy transition could lead to sizeable losses for financial institutions. Governments can help to avoid unnecessary losses through a timely implementation of effective climate policies, while financial institutions can mitigate their vulnerability to a disruptive energy transition by including energy transition risks in their risk management.
More details can be found in the Occasional Study and Web-appendix .