o:28763 Financial Stability and Climate Change en Abstract: Fighting climate change is one of the biggest challenges in the 21st century. Climate change that leads to global warming has been increasingly visible in our environment. Extreme weather con- ditions such as hurricanes, floods, and droughts have been escalat- ing and their acceleration can be expected in the future. They cause changes in sea levels, epidemics, large fires, etc. Increasingly, we are witnessing minor or major damage caused by these extreme weather conditions. Numerous studies have proven that climate change has negative impact on economic growth and prosperity. However, this paper starts from the premise that in addition to unequivocally iden- tified threats, climate change also creates opportunities. The paper reaches a conclusion that climate change can adversely affect balance sheets of financial institutions. Therefore, climate change is a source of financial risk and thus a part of the mandate of central banks and supervisors in preserving financial stability. This type of risk has not been given enough attention by either su- pervisors or financial institutions over the past period. This paper develops a model for managing financial risks as a result of climate change. Key words: climate change, financial stability, financial risks, man- agement 1552099 10.2478/jcbtp-2020-0034 1552101 1800-9581 2023-04-11T11:53:49.761Z 44 no 46 Nikola Fabris Univerzitet u Beogradu Ekonomski fakultet 12815463 0000-0001-9500-1943 application/pdf 1267920 https://phaidrabg.bg.ac.rs/o:28763 no yes 16 70 92000001 11A03 Journal of Central Banking Theory and Practice 9 3 27 43 2020