The Central Bank of Egypt (CBE) hosted a training program on “Integrating Climate Risks into Microprudential and Macroprudential Stress Testing for Central Banks,” with the participation of 25 representatives from 11 central banks of member states of the Common Market for Eastern and Southern Africa (COMESA), along with a delegation from the COMESA Monetary Institute (CMI).
In a statement on Wednesday, October 21, 2026, the CBE said the program was part of its ongoing cooperation with the CMI and efforts to promote integration among African central banks and strengthen their capacity to assess climate risks and their implications for the banking sector and financial stability.
The five-day program was held at the Egyptian Banking Institute (EBI) in Cairo. It featured specialized discussions and practical exercises on assessing climate risks and incorporating them into microprudential and macroprudential stress tests using econometric models, as well as presentations on the experiences and expertise of participating central banks in this field.
The sessions covered stress-testing applications for several banking risks, including credit and liquidity risks, as well as the effects of climate change and interbank contagion risks. The discussions aimed to strengthen central banks’ ability to assess the impact of various scenarios on the soundness of financial institutions.
The program was delivered by lecturers from the CBE’s Macroprudential Supervision Sector, Off-site Supervision Sector and Sustainability Department within the Financial Inclusion Sector. The sessions combined theoretical and practical components addressing mechanisms for incorporating climate risks into microprudential and macroprudential stress-testing frameworks.
The program also provided an opportunity for representatives of participating central banks to exchange expertise on existing practices and challenges in assessing climate risks and their potential impact on banking sector performance and resilience to shocks.
Discussions also highlighted the role of stress testing in supporting banking supervision and strengthening financial stability. Such tests are important in helping central banks assess financial institutions’ ability to withstand various economic and financial scenarios, including risks arising from climate change and their potential implications for asset quality, funding and liquidity.
At the conclusion of the program, participants developed a set of proposals and recommendations aimed at deepening understanding of the implications of integrating climate risks into stress testing for the operations of central banks in COMESA member states. The recommendations are to be discussed by central bank governors at their next annual meeting, scheduled to take place in Malawi in November 2026.
The program reflects efforts to strengthen coordination and expertise-sharing among African central banks in addressing emerging risks and developing supervisory tools to assess banking systems’ resilience to shocks. It also highlights the role of regional cooperation in advancing supervisory frameworks and exchanging technical practices, helping central banks address climate risks as part of broader risk-management systems and efforts to maintain financial stability across COMESA member states.
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