BOJ's Kuroda warns of climate-related risk for financial stability

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda, speaks during an interview with Reuters in Washington, U.S. October 19, 2019. REUTERS/Carlos Jasso

TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Thursday climate-related risk is an example of new issues central banks must face in maintaining financial stability.

Natural disasters, such as the strong typhoon that struck Japan in October, may erode asset and collateral value, and the associated risk may pose a significant challenge for financial institutions, Kuroda said.

“Climate-related risk differs from other risks in that its relatively long-term impact means that the effects will last longer than other financial risks, and the impact is far less predictable,” he said in a seminar.

“It is therefore necessary to thoroughly investigate and analyze the impact of climate-related risk,” Kuroda said.

Reporting by Leika Kihara; Editing by Chris Gallagher