Please allow JavaScript whether it is disabled in your browser or entry the data via the hyperlinks supplied beneath.
September 29, 2022
Federal Reserve Board proclaims that six of the nation’s largest banks will take part in a pilot local weather state of affairs evaluation train designed to boost the power of supervisors and corporations to measure and handle climate-related monetary dangers
For launch at 10:00 a.m. EDT
The Federal Reserve Board on Thursday introduced that six of the nation’s largest banks will take part in a pilot local weather state of affairs evaluation train designed to boost the power of supervisors and corporations to measure and handle climate-related monetary dangers. State of affairs evaluation—by which the resilience of monetary establishments is assessed below completely different hypothetical local weather situations—is an rising software to evaluate climate-related monetary dangers, and there shall be no capital or supervisory implications from the pilot.
The pilot train shall be launched in early 2023 and is anticipated to conclude across the finish of the yr. At first of the train, the Board will publish particulars of the local weather, financial, and monetary variables that make up the local weather state of affairs narratives.
Over the course of the pilot, taking part corporations will analyze the influence of the situations on particular portfolios and enterprise methods. The Board will then assessment agency evaluation and have interaction with these corporations to construct capability to handle climate-related monetary dangers. The Board anticipates publishing insights gained from the pilot at an combination stage, reflecting what has been discovered about local weather threat administration practices and the way insights from state of affairs evaluation will assist establish potential dangers and promote threat administration practices. No firm-specific info shall be launched.
Local weather state of affairs evaluation is distinct and separate from financial institution stress assessments. The Board’s stress assessments are designed to evaluate whether or not giant banks have sufficient capital to proceed lending to households and companies throughout a extreme recession. The local weather state of affairs evaluation train, alternatively, is exploratory in nature and doesn’t have capital penalties. By contemplating a variety of attainable future local weather pathways and related financial and monetary developments, state of affairs evaluation can help corporations and supervisors in understanding how climate-related monetary dangers could manifest and differ from historic expertise.
The banks within the pilot train are Financial institution of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. In coming months, the Board will present further particulars on how the train shall be carried out and the situations that shall be used within the pilot.
For media inquiries, please e mail [email protected] or name 202-452-2955.
Final Replace:
September 29, 2022