Echoing a stance taken by another regulator earlier this week, the Federal Reserve Friday said it has withdrawn from an international group of regulatory agencies focused on climate-change policy.
The Fed said that it has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a group formed in 2017 in Paris at the “One Planet Summit.” The secretariat for the group is based in the Banque of France.
According to NGFS, the group is dedicated to help strengthen “the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize mainstream finance in the context of environmentally sustainable development.”
In withdrawing from the group, the Fed said the “work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the Board’s statutory mandate.”
The Fed also said it has appreciated the engagement with the NGFS and its members.
On Monday, Federal Deposit Insurance Corp. (FDIC) Board Vice Chair Travis Hill (a Republican appointee) said that, soon after current Board Chairman Martin Gruenberg retires from the board (set for Sunday), he expects the agency to withdraw from the NGFS. Hill, as vice chairman, is expected to succeed Gruenberg, at least as acting chairman.
In a speech earlier this week, Hill contended that the FDIC has had a “misguided focus on climate.” He said there is no record of a bank failing due to climate-related events, and no evidence that such events “pose an elevated safety and soundness or financial stability risk for banks.” He said the agency’s role is not to use banks to pursue environmental policy.
He also vowed that that FDIC won’t be issuing any future “quantitative or qualitative climate disclosure regime” for banks in the U.S., such as that proposed by the Basel Committee.
Hill made his remarks before the American Bar Association.
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