Abstract
This research is significant as it examines a crucial yet underexplored intersection between climate change and the stability of the banking system in Sub-Saharan Africa. Although extensive studies have addressed the economic consequences of climate changeacross various sectors worldwide, the interaction between climate dynamics and financial system stability, particularly in developing regions, has received comparatively little attention. This study assesses the impact of climate change on banking sectorstability in 29 selected Sub-Saharan African nations, utilising annual data spanning from 1996 to 2017. The analysis employs the Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) methodology and incorporates essential control variables, including net interest margin, bank concentration, money supply, and regulatory quality, to ensure the robustness of the estimates. The empirical results reveal no statistically significant short-term or long-term influence of climate change on banking stability within the sampled countries. Nonetheless, the findings underscore the importance of governments proactively integrating climate-related policies into the regulatory and operational frameworks of the banking sector to mitigate potential systemic risks in the future. These conclusions provide valuable guidance for policymakers and financial regulators seeking to enhance the resilience of the financial system amid growing climate uncertainties.