As climate change intensifies and policy responses evolve, there is a growing consensus in the literature that climate risk is already significant for banks in the short term (Noth and Schüwer 2023, Batten et al. 2016, Vermeulen et al. 2021, ISDA 2023). Beyond the direct impact of damages from climate hazards or the sudden repricing of financial assets, climate-related risks lead to changes in behaviour and thereby in macroeconomic outcomes in the near term (Erlandsen et al. 2025, Bilal and