Australia's financial system may be vulnerable to the effects of climate change, which could be exacerbated by the carbon-intensive economy, lack of policy clarity, and reliance on global capital markets, analysis released by The Climate Institute shows. The discussion paper, “Australia’s Financial System and Climate Risk”, identifies risks that the Australia’s financial system could be destabilised by both direct climate change impacts and secondary effects, such as a slump in demand for carbon-intensive exports. It examines general risks posed to all financial systems, and considers which risks could be particularly relevant to the Australian economy and financial system, through the broader economy, superannuation funds, mortgages, and our place in global capital markets. It then puts a case for a comprehensive assessment by financial authorities, to ensure the system is resilient to climate-related shocks.