The federal bank regulatory agencies have announced the withdrawal of the interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions. The decision was made because the agencies believe that their current safety and soundness standards are sufficient. These standards require all supervised institutions to maintain effective risk management that matches their size, complexity, and activities.
The agencies stated, “The agencies do not believe principles for managing climate-related financial risk are necessary because the agencies’ existing safety and soundness standards require all supervised institutions to have effective risk management commensurate with their size, complexity, and activities. In addition, all supervised institutions are expected to consider and appropriately address all material financial risks and should be resilient to a range of risks, including emerging risks.”
The withdrawal is formalized in a Federal Register notice and is accompanied by statements from Vice Chair for Supervision Bowman, Governor Barr, and Governor Cook.
