Fed governor questions importance of climate risks to financial system (2023)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Fed Governor Christopher Waller spoke on May 11 at an economic conference in Spain and said that, in his view, climate change does not pose what he called a "significantly unique or material" risk to the financial system:
| “ |
Climate change does not pose such "significantly unique or material" financial stability risks that the Federal Reserve should treat it separately in its supervision of the financial system, Fed Governor Christopher Waller said on Thursday in a detailed rebuttal of demands for climate initiatives by the U.S. central bank. "Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States," Waller told an economic conference in Spain. "Risks are risks ... My job is to make sure that the financial system is resilient to a range of risks. And I believe risks posed by climate change are not sufficiently unique or material to merit special treatment." The aim of Fed oversight and stress tests of bank balance sheets, he said, was "general resiliency, recognizing that we can't predict, prioritize, and tailor specific policy around each and every shock that could occur." "In March we watched a bank run on Silicon Valley Bank" that heightened attention to the levels of uninsured deposits at some institutions, Waller said. "Those are the kinds of things I am staring at right now. I am not as worried about climate as I am about things like banks failing because of bank runs."… In his remarks on Thursday, Waller said science had "rigorously established" the climate is changing. But in assessing financial stability, U.S. central bankers needed to ask only if those changes would have a "near-term" impact, with potential losses large enough to affect the macroeconomy, he said. Waller argued they won't, noting that banks are already adept at hedging against weather-related losses, while more slow-moving changes - to coastal residential patterns as sea levels rise, for example - were analogous to population losses seen over the decades in cities like Detroit, locally important, but not systematically so.[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||||||||||||||
