In its first climate stress test for the financial system, the British central bank estimated possible losses for insurers and banks on the island up to 2050 in various scenarios.

In the worst scenario, she assumes no further climate protection at all, the temperature will rise by 3.3 degrees Celsius compared to pre-industrial times.

It then comes to more than £330bn in losses for banks and insurers over the next thirty years, according to its report published this week.

Philip Pickert

Business correspondent based in London.

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In either scenario, banks would have to write off loans and assets, such as holdings in fossil industries;

Insurers would have to bear higher losses due to the consequences of climate change.

For around two million households, their real estate would hardly be insurable, for example because they were in flood areas.

The Bank of England estimates that if governments react late to climate change, insurers and banks would lose 289 billion.

If we act quickly to protect the climate, the financial consequences could be limited to a good £209 billion by 2050.

The central bank meanwhile emphasizes that all estimates are subject to great uncertainty.

Sam Woods, head of the Fed's PRA, stressed that "over time, climate risks will become a persistent drag on bank and insurer profitability, especially if not properly managed."

The central bank is urging the financial industry to reduce its investments in fossil fuel industries, which will fall in value as we move towards a zero-carbon world.

Losses would vary widely depending on the company and scenario, but annual profits could be reduced by 10 to 15 percent.

KPMG's climate risk expert Begoña Ramos Justo was quoted as saying that this magnitude "won't endanger the system," but it does make the financial industry more vulnerable.

Just a few days ago, HSBC manager Stuart Kirk's speech, which made fun of apocalyptic climate warnings, caused a stir.

The bank had hastily distanced itself from Kirk and released him from his post.

Meanwhile, more critical voices about the central bank can be heard from the ruling Conservative Party.

Tory MP Steve Baker said the Bank of England should focus on its core mission of monetary stability and monetary policy at a time when inflation is heading towards 10%.