WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in connection with the release of a Fact Sheet titled “Banking Regulators Must Act Fast to Catch Up on Climate Financial Risk Management to Protect Main Street America.”
“Banks face enormous risks from climate, but are woefully unprepared to even evaluate those risks, much less actually do something about them to ensure their safety, soundness, and financial stability. Those deficiencies and failures are compounded by banking regulators who have repeatedly failed to take even modest steps to require banks to take appropriate actions in response to those growing risks. This has nothing to do with climate management, climate policy, or taking sides in the disputes over climate. This is pure and simple basic bank risk management. The fact those risks arise from climate is irrelevant; risk management is agnostic as to where or why the risks arise. That simply doesn’t matter. Only properly managing those risks wherever they come from matter and, at that, both banks and banking regulators are failing, as starkly illustrated by the Fed’s climate scenario pilot and grossly inadequate response.
“There is simply no legitimate dispute that climate risk continues to grow and become more dangerous to America’s families, small businesses, capital formation, community banks and banks of all sizes, financial stability, and ultimately the entire economy. These risks continue to drive property insurance rates higher and make homes more unaffordable, most of which are collateral for banks’ loans and, therefore, pose a direct threat to the safety and soundness of banks.
“The urgency of this situation can no longer be ignored. In our Fact Sheet, we detail how the Federal Reserve still has not seriously addressed climate-related financial risks’ effect on banks. Additionally, we show how financial regulators in the rest of the world are ahead of the U.S. when it comes to protecting society from climate-related financial risks. U.S. regulators simply must prioritize climate-related financial risk management. The urgency of the risks posed by the climate crisis can no longer be ignored; it directly threatens Main Street Americans, businesses and banks of all sizes, and, ultimately, financial stability and the economy. The Fact Sheet provides the context and action items for the banking regulators to catch up to the risks that they have failed to address for far too long.”
The Fact Sheet is available here.
###
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.
