WASHINGTON, D.C.— Dennis Kelleher, President, CEO and Co-founder of Better Markets, issued the following statement in response to a Bloomberg report that the Federal Reserve has disbanded its groups that examine climate-related financial risks for large banks:
“Today’s report that the Federal Reserve (“Fed”) has disbanded its internal groups that assess the exposure of the largest, most dangerous Wall Street banks to climate risks is a dereliction of duty. The Fed is mandated to analyze risks regardless of source or origin and ensure that banks and the banking system properly manage those risks to protect the American people, the financial system, and the economy. This move politicizes the Fed’s risk analysis because it was not done based on a neutral, unbiased analysis of the merits, but to appease climate deniers, the fossil fuel industry, and their political allies. This is just the latest action by Chair Powell that politicizes the Fed and undermines his and its credibility and legitimacy.
“Proving that this was a political move based on the last election, the Fed’s action was done after the Fed itself just last year identified deep and broad deficiencies in basic climate risk analysis and management at Wall Street’s six largest too-big-to-fail banks through its narrow, limited pilot climate scenario analysis. It also follows the Wall Street banks themselves warning of catastrophic climate risk. Denying the impact of the many risks to banks and the banking system from climate and the gross deficiencies of Wall Street’s banks to even assess much less mitigate them does not make those risks go away. They will only fester, metastasize, and ultimately materialize. When added to the many other baseless and irresponsible deregulatory efforts at the Fed and elsewhere, this action will contribute to the inevitable coming financial crash.
“The American people deserve—and the law requires—regulators to ensure banks identify and address all material risks, regardless of the source. Unfortunately, the Fed is blowing with the political winds and abandoning its responsibility related to climate risks to be an independent supervisor of the banking system that protects the American taxpayer. History is going to judge Chair Powell and the Fed harshly, as it has regarding the Fed’s actions and inactions in the years leading up to and contributing to the catastrophic 2008 crash.”
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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.
