Increased flood risks caused by climate change will also affect banks

Abstract

Due to climate change, extreme weather events will become more frequent, resulting in material damage to buildings and other infrastructure. In Finland, for example, this will probably increase the risk of coastal floods. Many of the properties used as loan guarantees are located in coastal areas, meaning collateral worth hundreds of millions of euros will probably be exposed to coastal flood risks. The problem will also be exacerbated in the future by the shift of population and economic activity from the interior regions to coastal areas.