Powell: Not Fed Policy to Tell Banks Which Businesses to Lend to

Federal Reserve Chairman Jerome Powell told the House Financial Services Committee today that, regarding his agency’s work on mitigating climate change-related risks, it is a “long-held policy of the Fed that we don’t tell banks what legal businesses they can lend to.”

He noted that that the Federal Reserve is in the “early stages” of understanding the risks climate change poses to financial institutions, and considering stress scenarios about climate change. Powell acknowledged that many large financial institutions are already studying the risks associated with climate change, and that the Fed is studying it to learn “how the financial system can be resilient against what may be very significant emerging risks over time.”