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June 3, 2022

FDIC Takes Important Step Towards Managing Climate-Related Financial Risks

WASHINGTON, D.C.—Phillip Basil, Director of Banking Policy, issued the following statement on the filing of Better Markets comment letter to the Federal Deposit Insurance Corporation (FDIC) on their request for comments regarding its proposed principles for climate-related financial risk management for large banks.

“We applaud the FDIC for incorporating climate-related financial risks into its risk management expectations for large banks and for doing so in a way that is consistent with the Office of the Comptroller of the Currency’s proposed principles. It is critical that the federal banking agencies work together and are coordinated in their efforts to address climate-related risks to the financial system.

“The proposed principles from the OCC and FDIC achieve that goal but must be enhanced to make them more beneficial. The principles sensibly integrate the management of climate-related risks into existing risk management principles but also add a few important factors that recognize that climate risks and their management are an evolving process and require longer time horizons. However, the principles should do more to promote best practices and standards to bring about a consistency that would benefit banks, consumers, investors, and the regulatory agencies themselves.

“We urge the FDIC and OCC to work together to finalize and implement these principles with the modifications noted in our comment letter. The Federal Reserve soon must follow these agencies to enhance 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: Anton Becker, Communications Director, at 202-618-6430 or abecker@bettermarkets.org

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