Assessing nature-related risks in the Hungarian financial system: Charting the impact of nature's financial echo

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 naturerelated 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.