"Climate Change A Rising Fed Concern As Nominees Face Hearing"

"WASHINGTON — How far the Federal Reserve can go to compel banks to consider the consequences of climate change in their lending policies could take center stage at a Senate hearing Thursday on the nominations of Sarah Bloom Raskin and two economists to the Fed’s influential Board of Governors.

The Fed is already moving toward analyzing the risks that banks face from rising temperatures and changing weather patterns. What many in the oil and gas industry fear is something more far-reaching: That the Fed may eventually take steps to discourage banks from lending to energy companies — the first time, they say, that the central bank would be acting to disadvantage a specific industry.

A host of trade associations and business groups have written to the Senate Banking Committee in advance of the hearing, expressing concern about the nomination of Bloom Raskin to be the Fed’s vice chair of supervision, the board member who leads its regulation of banks. Bloom Raskin has been outspoken in her belief that climate change poses risks to the economy and the financial system and that regulators should factor those risks into their oversight."

Christopher Rugaber reports for the Associated Press February 1, 2022.

Source: AP, 02/02/2022