US banking regulators are working on climate risk management guidelines, official says


An aerial view of the floating ice taken by a drone launched from Greenpeace’s Arctic Sunrise ship in the Arctic Ocean on September 15, 2020. Photo taken on September 15, 2020. REUTERS / Natalie Thomas

WASHINGTON, Sept. 15 (Reuters) – U.S. banking regulators are working on new climate risk management guidelines for major lenders, a senior official said on Wednesday, in another sign of efforts to incorporate risks posed by rising lenders. temperatures in the financial rules.

Acting Currency Comptroller Michael Hsu said his agency was working on the guidance in collaboration with other bank regulators to help lenders manage the physical and transitional risks that climate change poses to the financial system.

Climate change could disrupt the financial system, as threats such as sea level rise, along with carbon-neutral policies and technologies aimed at slowing global warming, could destroy billions of dollars in assets, according to risk experts.

“Climate change presents an existential risk to society and the associated financial risks pose a risk to the safety and soundness of banks. To preserve confidence, banks and regulators must start acting now,” Hsu said at the time. of a speech in Washington.

The Federal Reserve has asked lenders to provide information on the measures they are taking to mitigate climate change risks to their balance sheets, Reuters reported in May. Since then, Fed officials have said they will consider testing bank balance sheets against weather scenarios.

Hsu’s comments are the first to suggest, however, that regulators are working on broader guidelines that could affect a much broader set of lenders nationwide and the companies they do business with. While guidance does not have the same legal weight as a formal rule, it is often as effective and can be implemented much faster, according to lawyers.

Reporting by Michelle Price; Editing by Cynthia Osterman

Our standards: Thomson Reuters Trust Principles.

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