Fed: Climate change focus not seeking to discourage business investment

It has never been the Federal Reserve’s policy to discourage banks from offering accounts or services to law-abiding businesses, and pursing such an aim is not a part of the agency’s work looking into climate-related financial risk, Michael Gibson, director of supervision and regulation, will say Tuesday in prepared remarks to the House Financial Services Subcommittee on Financial Institutions and Monetary Policy. The subcommittee is holding a hearing on climate change and financial regulators. Representatives from the Fed, OCC, FDIC and National Credit Union Administration are scheduled to testify.

The Fed earlier this year launched a pilot program to learn about the climate risk-management practices at the nation’s largest banks. Gibson said that program will help the agency identify potential risks and promote effective risk-management practices. The program “is exploratory in nature and does not have consequences for bank capital or supervisory implications,” he said. He also repeated previous comments by Fed Chairman Jerome Powell that the agency is not a climate policymaker. “The Federal Reserve’s supervisory responsibilities are focused on understanding and mitigating the potential impact of climate change on supervised banks,” Gibson said.