The National Bank of Georgia publishes the next paper in its NBG Working Paper Series. The working papers aim to present research on topics relevant to central banks and economics profession. The papers are circulated to elicit comments and encourage debate on ongoing research. The Working Paper Series are coordinated by the Macroeconomic Research Division and focus on topics relevant for central bank policy, including macroeconomic modeling, monetary and exchange rate policies, financial stability, etc.

The next working paper in the series titled "Biodiversity-related Financial Risks – why it matters and how can we measure them? Case study of Georgia" was prepared by Elene Nikuradze and Salome Tvalodze (all NBG). The aim of the study was to examine the connections between biodiversity loss and financial stability. The paper presented the assessment of biodiversity-related financial risks in Georgia and provided quantitative estimates of potential dependencies and impacts of the financial system on biodiversity and ecosystem services. According to the main findings, around 46 percent of the Georgian commercial banks' lending portfolio to legal entities could be potentially exposed to physical risk due to their significant dependence on one or more ecosystem services. Furthermore, about 54 percent of the banks' business lending portfolio are exposed to sectors that have a strong negative impact on ecosystem services, potentially leading to a high transition risk.

The working papers can be accessed at the following page.