WASHINGTON, D.C.—Phillip Basil, Director of Banking Policy, issued the following statement on the filing of Better Markets’ comment letter on the Office of the Comptroller of the Currency (OCC)’s draft principles for climate-related financial risk management for large banks.

“Better Markets applauds the OCC’s move to be the first U.S. banking regulatory agency to propose principles for the management of climate-related financial risks. Since the OCC has supervisory authority over the nation’s largest banks, this is an important step in addressing the risks climate change poses to our banking system.

“The U.S. has been lagging behind many other countries in its efforts to address these risks, and incorporation into supervisory assessments not only goes a long way in bringing us in line with international efforts but also it is a necessary action to protect our banking system from overlooked risks leading to a financial crash.

“Considering the broad range of effects climate change can have on assets banks hold, the OCC’s proposed principles sensibly largely integrated the management of climate-related risks into existing risk management principles. But they also added a few important aspects: the use of scenario analysis to identify and size risks, the consideration of longer time horizons, and the recognition that climate risks and their management are an evolving process.

“We urge the OCC to finalize and implement these principles with some modifications noted in our comment letter for the safety and soundness of our banking system and to protect the livelihoods of hard-working Americans.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.

Contact: Evelyn Swan at 202-618-6433 or eswan@bettermarkets.org