Climate-related financial risk supervision framework of the State Bank of Vietnam

Abstract

limate change is happening rapidly and poses a significant risk to the global economy.
International organizations have issued many regulations to manage and supervise climate-related financial
risk (CRFR) to ensure the financial system’s safety. This paper uses the content analysis method to evaluate
the CRFR monitoring framework of the State Bank of Vietnam compared with the Basel Committee on
Banking Supervision. The results show that the CRFR supervision framework in Vietnam is still under
development; the regulations and guidelines are not specific and not yet in line with the international
framework, such as not clearly defining the responsibilities of senior management in CRFR monitoring, not
providing guidance on the implementation, evaluation, and monitoring of the results of scenario analysis and
stress testing on the resilience of banks to climate change, not clearly announcing the monitoring objectives
and improving the quality of supervisors, and not requiring financial institutions to disclose information
related to CRFR.