Media Release
22 November 2024
The Australian Embassy Jakarta today hosted a panel highlighting financial regulators and industry are working together to address climate-related risks in the financial sector.
Australian Prudential Regulation Authority Deputy Chair Margaret Cole addressed the event, together with Joko Siswanto, Director of Sustainable Finance at the Indonesian Financial Services Authority (OJK), Irman Robinson, the Director of Macroprudential Policy at Bank Indonesia and Mutia Prabawati, Project Finance Manager at Akuo Energy.
The direct impacts of climate change, including floods, bushfires, rising sea levels and increasing temperatures, can impact on financial institutions by damaging assets, increasing insurance claims, reducing the value of investments and increasing credit risk for lenders.
“I honour the relationship with the Indonesian Government, it is very important to us,” said Deputy Chair Cole.
APRA regulates 1,790 financial institutions in Australia and is responsible for protecting $8.6 trillion of assets on behalf of customers of banks, credit unions, building societies, general insurers, life insurers, health insurers and superannuation funds.
The prudential regulator has a long-standing collaboration with OJK in Indonesia.
In 2022 the two regulators signed a Memorandum of Understanding, agreeing to cooperate in areas including information sharing, crisis management, technical assistance and capacity building.
APRA is working with OJK to strengthen banking sector resiliency in the face of climate change through the development of a Climate Risk Stress Framework through Prospera, the Australia-Indonesia Partnership for Economic Development. This work is being done in collaboration with Australian Treasury, the Reserve Bank of Australia and the Australian and Securities Investments Commission.
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