Description

The World Bank Group (WBG) is one of the largest sources of funding and knowledge for developing countries; a unique global partnership of five institutions dedicated to ending extreme poverty, increasing shared prosperity, and promoting sustainable development. With 189 member countries and more than 120 offices worldwide, WBG works with public and private sector partners, investing in groundbreaking projects and using data, research, and technology to develop solutions to the most urgent global challenges.

As unprecedented shocks and uncertainty have hit the Europe and Central Asia region (ECA) in recent years, the WBG is focusing on a strategy to deliver on its objectives through boosting human capital, facilitating green transitions, enabling markets, and building and strengthening institution. In this context, the Finance, Competitiveness, and Innovation Global Practice (FCI), part of the WBG Equitable Growth, Finance, and Institutions Practice Group, plays a key role in achieving this strategy. By providing financial stability, efficiency, and firm-level solutions in an integrated way, FCI supports client countries develop the essential enabling environment to crowd in the private sector, support the creation of markets, and accelerate equitable growth.

Organized within the ECA FCI units, the World Bank Financial Sector Advisory Center (FinSAC) is a dedicated technical unit funded by the Austrian Federal Ministry of Finance. Established in 2011 as a follow-up to the Vienna Initiative to assist ECA countries in dealing with legacy issues of the Global Financial Crisis, it delivers tailored reform advice and implementation assistance on financial stability topics. Bilateral technical assistance projects and knowledge sharing events provide the main avenues for the flow of FinSAC support to client countries, in alignment towards European standards and international best practices. Details of FinSAC operations and client countries could be found at its website at https://www.worldbank.org/en/programs/financial-sector-advisory-center.

Financial institutions are increasingly impacted by climate-related financial risks, presenting both investment opportunities and economic adjustment costs related to reaching global, regional, or national climate goals, including the Paris Agreement. Governments and regulators are reinforcing the financial sector’s role in managing climate risks and promoting capital for green development. Entities like the Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) provide guidance for better risk management. Despite progress, there is a need to enhance financial regulators’ capacity to integrate climate considerations, especially in developing countries which are often highly vulnerable to the impacts of climate change and nature loss.

Among other things, FinSAC also supports client countries in bolstering the stability of financial sectors concerning climate risks, while at the same time improving the ability of financial sectors to mobilize capital for climate and nature objectives. The team offers technical assistance (TA) on assessing climate risks and integrating them into financial sector regulatory and supervisory framework. Additionally, the team provides diagnostics on climate risks, including recommendations for improving data quality, as well as support client country authorities to enhance their internal capacities via tailored training and workshops. Technical tools, such as climate exposure analysis and stress testing, are designed to support TA. In this process, FinSAC team collaborates extensively with other World Bank units both on regional and global level.

Roles and responsibilities:

The World Bank FinSAC seeks to recruit an Extended Term Consultant (ETC) to support the work on regulatory aspects of climate related risks, climate risk analyses, and broader ESG matters in FinSAC client countries.

As regards to microprudential regulation and supervision, the selected candidate is expected to:

• Support the design of prudential guidelines, standards, and regulations on the climate related financial risks for the client country authorities. Among other things this could include requirements for bank strategies; carbon transition plans; corporate governance and organizational structures; integration of climate risk in banks’ credit and operational risk management frameworks; bank disclosure requirements; approach to capital requirements, etc.

• Support the client country authorities in embedding climate risks in their supervisory methodologies and actions. Among other things this could include analysis of banks’ self-assessment of compliance with standards; assessment of transition plans; horizontal reviews; off-site analytical tools; approached to on-site supervision; practical guidance on best practices; Pillar II requirements; SREP methodologies (business models; internal governance and risk management frameworks; credit, operational, market and liquidity risk levels and controls); consolidated supervision; supervisory coordination and colleagues, etc.

As regards to macroprudential aspects of climate related financial risks, the selected candidate is expected to provide quantitative support for climate financial risk assessments and the design of stress-tests. Specifically, the role of the selected candidate will include but is not limited to:

• Supporting country specific analyses that will help client countries in assessing climate risks for financial sectors (with priority on banking). Independently, the ETC is expected to be able to produce – and support the client with – high quality end products, such as preparation of green dashboards, climate risk assessments, stress tests and methodology descriptions. 

• Supporting the development and application of globally applicable analytical frameworks, methodologies (e.g. macro- and microeconomic approaches) and datasets for measuring and assessing climate risks and opportunities for financial sectors aligned with emerging international standards and adapted to the country context.

• Supporting the development of climate risk scenarios for client countries based on globally available methodologies and best practices.

• Supporting diagnostics and assessments of the current state of available data and models related to climate and recommendations for bridging data gaps and internal capacity building for authorities. Work will include mission support, where the ETC is expected to be able to assess risks stemming from climate-related sources and provide guidance to financial sector regulators and supervisors on how to identify, measure and manage these risks. 

• Preparing and reviewing reports on climate risk and opportunity developments and challenges and providing support in the preparation of knowledge products related to climate risks and greening financial sector (seminars, blog posts, policy papers etc.).

The selected candidate is also expected to contribute to FinSAC’s broader TA and knowledge activities across FinSAC client countries covering different financial stability related topic, including crisis management, conventional macro and micro prudential supervision, deposit insurance, NPL resolution, bank resolution, etc.

Selection Criteria

• An advanced degree (Master’s/PhD) in relevant area, for example Finance, Economics, Econometrics, Business Administration, Mathematics, Climate Change and Environmental Science or a related field.
• Applicants must have a minimum of 5 years of relevant work experience (with a Ph.D. considered equivalent), with a focus on analyzing climate risks within the financial sector. The candidate’s professional background should encompass roles in financial sector authorities (such as central banks, prudential regulators, supervisors, or Ministries of Finance), International Financial Institutions, financial institutions or service providers, or academia.
• Strong quantitative and econometric skills, with high proficiency in at least one of the following data science toolkits, such as Stata, Python or R.
• Experience in assessing climate risks for the financial sector, with strong knowledge of climate physical and transition risk scenarios and relevant modeling approaches.
• Experience in performing supervisory stress tests in a central bank, banking supervisory agency, international financial institutions or private financial institution is a strong plus, and required in case limited exposure to climate risk analysis.
• Good knowledge of financial sector policy issues related to climate risks. Broader experience and knowledge on financial stability and banking supervision issues is a plus.
• Excellent written and oral communication skills in English, as well as demonstrated ability to advocate positions and defend orally and in writing difficult issues and positions to government officials and others.
• Ability to work independently and willingness to travel.
• Additional knowledge of nature related risks for financial sector will be an advantage.

World Bank Group Core Competencies

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