Natural disasters pose increasing risks for banks

Natural disasters are becoming more common, posing growing challenges to banking operations and requiring banks to incorporate them into their risk management approaches, according to the chief of the Thai Bankers’ Association (TBA).

- SOMRUEDI BANCHONGDUANG

Payong Srivanich, chairman of the TBA and president of Krungthai Bank, said natural disasters are a growing risk for financial institutions, requiring them to adopt more rigorous standards for risk assessment and management as environmental pressures intensify.

In response to these challenges, the Bank of Thailand instructed commercial banks to conduct climate-related stress tests to ensure they are resilient to extreme weather events and other environmental risks.