The Federal Deposit Insurance Corporation (FDIC) is taking aim at climate-related financial risks, issuing a request for comment on draft principles for large financial institutions. The move is intended to provide a framework for the safe and sound management of exposures to climate-related financial risks.
According to the FDIC, weaknesses in how financial institutions identify, measure, monitor, and control the financial risks associated with a changing climate could adversely affect a financial institution’s safety and soundness, as well as the overall financial system. The draft principles are designed to support efforts underway by large financial institutions to consider key aspects of climate-related financial risk management.
The draft principles are intended for the largest financial institutions, those with over $100 billion in total consolidated assets. The FDIC encourages financial institutions to consider climate-related financial risks in a manner that allows them to continue to prudently meet the financial services needs of their communities.
The FDIC is requesting comments from all interested parties within 60 days of publication in the Federal Register. The request for comment is substantively similar to the one issued by the Office of the Comptroller of the Currency on December 16, 2021. The FDIC’s move is seen as a significant step towards addressing the growing concern of climate-related financial risks.
Acting Chairman Martin J. Gruenberg stated that the FDIC is committed to supporting the safe and sound management of climate-related financial risks. The FDIC’s request for comment is an opportunity for financial institutions and other stakeholders to provide input on the draft principles and help shape the future of climate-related financial risk management.
The implications of the FDIC’s request for comment are far-reaching, with potential impacts on the entire financial system. As the FDIC works to finalize the draft principles, financial institutions and other stakeholders will be watching closely to see how the agency’s efforts will shape the management of climate-related financial risks. The FDIC’s move is a significant step towards addressing the growing concern of climate-related financial risks and promoting a more resilient financial system.
In a statement, Julianne Fisher Breitbeil, a spokesperson for the FDIC, said that the agency is committed to supporting the safe and sound management of climate-related financial risks. The FDIC’s request for comment is an opportunity for financial institutions and other stakeholders to provide input on the draft principles and help shape the future of climate-related financial risk management. Breitbeil can be reached at (202) 340-2043 for further information.
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