WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with the release of Better Markets’ new Fact Sheet, “Financial Regulators’ Refusal to Recognize Clear, Well-Known Climate Risks is a Dangerous and Costly Mistake”
“Recent hurricanes have caused unimaginable losses of human life in the Southeastern U.S. and also resulted in significant costs to Main Street Americans, small businesses, banks, insurers, and taxpayers. Historically, insurance has provided consumers, businesses, and banks with a vital buffer of protection against catastrophic losses from climate events. However, insurers are increasingly withdrawing coverage in the riskiest areas, leaving Main Street Americans and businesses vulnerable.
“Our fact sheet shows that actions by the Federal Reserve (“Fed”), the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”) (collectively, the “Banking Regulators”) have been inadequate in responding to the climate-related financial risks that threaten our banks. That’s why we provide 5 ways that the management of climate-related financial risks must change.
- Require enforceable rules that all large banks include climate-related financial risk in supervisory assessments, just like any other risk that affects the bank’s safety and soundness.
- Improve climate models and scenario analysis used by banks to assess risks.
- Enhance cooperation between climate scientists and bank regulators.
- Broaden and coordinate the collection of data to measure climate-risk vulnerability among Main Street Americans and businesses.
- Recognize the indirect impact of climate events, such as economic disruptions in local communities.
“Simply put, the American people deserve—and the financial system requires—regulators that hold banks accountable for all risks, regardless of the source.”
Find our fact sheet here.
