Deputy Governor Cakaj participates as panelist at international conference on climate risks and financial stability in Skopje

The Deputy Governor for Financial Supervision of the Central Bank of the Republic of Kosovo (CBK), Mr. Milot Cakaj, participated as a panelist in the international conference “Climate Risks and Financial Stability: Navigating today’s Challenges and tomorrow’s Opportunities,” organized by the National Bank of the Republic of North Macedonia in Skopje.

Deputy Governor Cakaj contributed to the panel titled “Supervisory Approach to Climate Risk,” moderated by Ismael Ahmad Fontan from the World Bank, which included high-level supervisory representatives from regional central banks, including the Bank of Albania, Central Bank of Montenegro, Central Bank of Bosnia and Herzegovina, and the Bank of Greece.

In his remarks, Deputy Governor Cakaj emphasized the importance of integrating climate risks into supervisory processes, highlighting that both physical and transition risks directly affect the business models and credit exposures of financial institutions. He stressed the need for a harmonized approach with the standards of the European Central Bank and the Basel Committee on Banking Supervision, as well as the importance of regional cooperation.

He highlighted a series of steps undertaken by the CBK over the past two years, including the integration of climate risks into the 2024-2028 Strategic Plan, membership in the Sustainable Banking and Finance Network (SBNF), and the publication of the first Guidance on Credit Exposures related to the climate transition, particularly under the European CBAM mechanism.

During the panel discussion, Deputy Governor Cakaj added that the adoption of the Guidance on Syndicated Loans and the Strategic Guidelines for Climate and Environmental Risk Management 2025-2027, developed with assistance from the World Bank’s FinSAC, has created a regulatory foundation for sustainable projects and long-term clean energy investments. In this context, the finalization of the Advisory Letter for the banking sector and the inclusion of climate risk in the SREP process represent the next steps in strengthening prudential supervision.

In conclusion, Deputy Governor Cakaj emphasized that the CBK’s approach is practical, progressive, and preventive, aimed at addressing risks that could affect the stability of the financial system, while timely tackling climate challenges that impact the country’s financial stability and economic development.