Huge banks would get local weather stress assessments beneath proposed U.S. regulation

By Katanga Johnson

WASHINGTON, Nov 20 (Reuters) – U.S. Democratic Senator Brian Schatz of Hawaii on Wednesday launched a invoice that may direct the Federal Reserve to topic giant banks to so-called “stress assessments” measuring their resilience to climate-related monetary dangers.

The proposed Local weather Change Monetary Threat Act of 2019 underscores rising worries amongst policymakers over the dangers posed to the monetary system by the frequency and severity of utmost climate occasions like floods and wildfires which may damage productiveness, asset valuations and the broader financial system.

The regulation would assist carry U.S. monetary regulators consistent with different world central banks in the UK and the Netherlands which have not too long ago begun quantifying the possibly systemic dangers attributable to local weather change, Schatz stated.

“Whereas our federal regulators are legally obligated to handle and scale back dangers within the monetary system, they’ve been ignoring the rising monetary dangers of local weather change”, stated Schatz in a press release unveiling the proposed laws.

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