Global warming is introducing unprecedented risk into the financial system. The Fed has the power to limit that risk. Instead, Jerome Powell is sitting on his hands.
Among other moves, regulators are likely to press banks to prepare for the fallout from a warming planet by stepping up scrutiny of fossil fuel financing.
Yesterday was a busy day for environmental policy on Capitol Hill, as two Senate panels simultaneously held hearings on thorny issues surrounding climate change and clean energy.
The climate crisis is at high risk of becoming an economic crisis. That is an increasingly widespread view among leading economic thinkers — that a range of economic and financial problems could result from a warming planet and humanity's efforts to deal with it.
On Thursday, Senate Republicans told Fed Chair Jerome H. Powell that they were concerned the Fed might use its supervision of the banking system to “further environmental policy objectives."
The U.S. Federal Reserve is beginning to incorporate the impacts of global warming into its regulatory writ, following in the footsteps of its global peers, according to a paper published by the San Francisco Fed.
