Assessing nature‑related risks in the Hungarian financial system

This paper presents a technical assessment of nature-related risks within the Hungarian economy and financial system. The study draws upon the OECD Supervisory Framework to (i) prioritise various nature-related risks by conducting an impact and dependency assessment, identifying key economic sectors, and pinpointing the critical natural capital assets that are most crucial to the financial system; (ii) assess the direct and indirect economic impact of three exploratory scenarios on possible acute nature-related shocks using input-output analysis; (iii) explore the different financial risk channels through which economic risks stemming from nature-related losses may be transmitted within the Hungarian financial system; and (iv) provide supervisory recommendations based on the results.