U.S. Climate Risk Guidance Will Be in Line With Global Principles, Bank Regulator Says

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The acting head of America’s top banking regulator called for climate risk to be included in stress tests and talked about guidance that his agency plans to issue

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Mr Hsu, who spoke at Businesshala Pro’s Sustainable Business Forum on Wednesday, detailed efforts by the Office of the Comptroller of the Currency to help banks better deal with the risks posed to their balance sheets by climate change and extreme weather events. be inspired.

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The OCC has said it plans to issue guidance for large banks on how to manage the financial risk created by climate change later this year. Mr Hsu said the guidance would be in line with the principles discussed in international forums such as the Network for Greening the Financial System, the Network of Central Banks and Financial Observers.

Guidance on climate risk will not be the agency’s last word, Mr Hsu said, adding that the agency will continue to drill into different areas of climate risk. “What does it really mean, to take and integrate brass attack, physical and infection risk, so that we know what good looks like?” he said.

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After the 2008 financial crisis, lawmakers have asked banks to undergo periodic stress tests to ensure their resilience in the event of an economic downturn or other crises. Although the OCC does not oversee such tests, which are administered by the Federal Reserve, Mr. Sue said climate-related scenarios should be a part of them.

“All of this will take some time, and it will take some work – we recognize that,” Mr. Sue said. “We need to build toward these muscles, because that’s how it turns into action.”

Dylan Tokar [email protected] . Feather

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