Federal Reserve Board to launch climate analysis exercise
03 October 2022 US
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The Federal Reserve Board has announced that it will launch a pilot climate analysis exercise in early 2023 to improve the ability of supervisors and firms to deal with climate risks by measuring their resilience to a series of hypothetical risk scenarios.
The six major US banks participating are Bank of America, Citigroup, Goldman Sachs, JPMorgan, Chase, Morgan Stanley, and Wells Fargo.
The exercise aims to improve the ability of supervisors and firms to deal with climate risks by measuring their resilience to a series of hypothetical risk scenarios. Details of methodology and the variables in these scenarios will be released prior to the pilot’s launch.
The pilot will allow for consideration of several pathways and economic developments to help firms understand how climate risks may impact them, and how these impacts can be mitigated.
Firms will assess how each scenario impacts specific portfolios and business strategies, the data from which will be reviewed by the Board. They will then work with the banks to improve their resilience, and publish non-firm-specific insights on climate risk management findings.
The six major US banks participating are Bank of America, Citigroup, Goldman Sachs, JPMorgan, Chase, Morgan Stanley, and Wells Fargo.
The exercise aims to improve the ability of supervisors and firms to deal with climate risks by measuring their resilience to a series of hypothetical risk scenarios. Details of methodology and the variables in these scenarios will be released prior to the pilot’s launch.
The pilot will allow for consideration of several pathways and economic developments to help firms understand how climate risks may impact them, and how these impacts can be mitigated.
Firms will assess how each scenario impacts specific portfolios and business strategies, the data from which will be reviewed by the Board. They will then work with the banks to improve their resilience, and publish non-firm-specific insights on climate risk management findings.
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