Fed asks 6 major US banks for climate risk analysis

The US Federal Reserve (Fed) has asked the country’s six largest banks to analyze the impact of climate change-related risks on certain assets in their portfolios. The Fed shared information about how the bank’s pilot climate scenario analysis study will be conducted. The statement said that qualitative and quantitative information will be collected in order to deepen the understanding of climate risk management practices and to create the capacity to identify, measure, monitor and manage climate-related financial risks. The statement said that climate risk analysis was requested from the six largest US banks, and noted that these banks will evaluate the impact that events such as floods, wildfires, hurricanes, heat waves and droughts may have on credit portfolios and commercial real estate assets. The statement reminded that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo will participate in the study, and that the period granted to banks for risk analyses will end on July 31. The Fed’s statement said that the information obtained from the analyses will be used to identify potential risks and develop effective risk management practices.