The Depository Trust & Clearing Corporation (DTCC) today published a whitepaper analyzing the impacts of climate-related financial risk on financial marketplace infrastructures (FMIs). The paper notes that FMIs are currently engaged in sufficiently robust business continuity programs to manage physical risks posed by extreme weather events. But this paper indicates that their programs must be enhanced to prepare for potentially more damaging climate-related events in the future.

The whitepaper also indicates that FMIs have both direct and indirect exposure to transition risk due to their relationship with financial institutions. Given the short duration of exposure, the whitepaper suggests adapting existing regulatory guidance such as CPMI-IOSCO’s Principles for Financial Market Infrastructures to effectively mitigate future climate-related financial risks.

Michael Leibrock, Chief Systemic Risk Officer at DTCC, notes that “climate change is no