Assessing and Managing Natural Disaster Risks for the Financial Sector in Thailand
Thailand’s history of severe floods, including the 2011 and 2024 events, highlights the growing threat of climate-related risks to its economy and financial sector. A study by the World Bank and the Bank of Thailand, using climate and bank-level data, found that a severe flood scenario could reduce output by up to 10 percent, raising nonperforming loans and financial stress, especially in high-risk areas along the Chao Phraya River.
These findings underscore the urgent need for financial authorities and institutions to strengthen climate risk assessment, management, and disclosure. To this end, the World Bank and Bank of Thailand hosted a workshop for banks, emphasizing the importance of integrating climate risk scenarios into financial sector practices, and laying the groundwork for enhanced resilience in line with global best practices.