While acknowledging the risks that climate change poses,Federal Reserve Governor Christopher Waller, a Trump appointee, remarked that catastrophic events like hurricanes and floods don’t generally reverberate across the U.S. economy.“Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States,” Waller said at a conference in Madrid. “My job is to make sure that the financial system is resilient to a range of risks, and I believe risks posed by climate change are not sufficiently unique or material to merit special treatment relative to others,” he added.
Many banks have begun to recognize the broad risks climate change poses to national economies, and officials within the Federal Reserve began debating how much emphasis banks should place on climate risk in a 2020 financial stability report. US Treasury reports have previously found that the risks driven by climate change can “affect the safety and soundness of banks through physical and transition risks, which affect various sectors of the economy and may affect access to financial services and fair treatment of customers.”(CNBC, Seeking Alpha, Reuters $, Bloomberg $, Wall Street Journal $)