Powell: Fed climate responsibilities narrow

Federal Reserve Chair Jerome Powell said the Fed has narrow responsibilities regarding climate-related financial risks, while broader climate policies should be made by elected officials.

Remarks: Speaking in Sweden, Powell said the public reasonably expects bank supervisors to require that banks understand and appropriately manage their material risks, including climate-related risks. “But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,” he said. “We are not, and will not be, a ‘climate policymaker.’”

ICBA Position: ICBA has long maintained the financial system should not be used to choke off lawful but climate disfavored industries. It also strongly opposes climate risk regulation of community banks and has told policymakers that any trickle-down effect of large bank regulation in this area will stifle innovation and create barriers to serving consumers and small businesses.

ICBA Advocacy: In a recent national news release that was picked up by Politico Morning Money and American Banker, ICBA said the New York State Department of Financial Services and other regulators should reconsider their climate risk proposals and their adverse effects on local communities. ICBA has also expressed concerns with the FDIC, OCC, and SEC climate risk proposals.