This report explores the materiality of long-term risks, which can create significant financial stability risks to financial markets while being outside the time horizon of financial supervision.

Key recommendations:

  1. Financial supervision should involve long-term scenario analysis and stress-tests of systemic risks.
  2. It should entail analyzing the ‘risk exposure’ of current assets based on maturity and amortization profiles.
  3. Finally, it should involve the integration of long-term risks into risk management frameworks.