Menu
Banking Exchange Magazine Logo
Menu

The Federal Reserve to Pull Out of Climate Coalition

The bank said it had decided to leave the network after the group’s work “increasingly broadened in scope"

  • |
  • Written by  Banking Exchange staff
 
 
The Federal Reserve to Pull Out of Climate Coalition

The Federal Reserve has pulled out of a coalition of central banks formed to tackle climate change risk in the financial sector.

The Network of Central Banks and Supervisors for Greening the Financial System was launched in 2017 to share best practices and contribute to the development of environment and climate risk management in the financial sector.

The NGFS, was formed to help central banks and other regulators exchange ideas and research as they figure out how to account for climate-related risks in the financial sector.

The network also aims to “mobilize mainstream finance to support the transition toward a sustainable economy.”

The Federal Reserve formally joined the Network of Central Banks and Supervisors for Greening the Financial System in December 2020, shortly after President Biden was elected.

Democrats praised that decision, arguing that regulators needed to make sure financial institutions were adequately managing the risk they faced from extreme weather events.

In a brief statement, the Fed said that while it appreciated the engagement with the NGFS and its members,  “the work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the [Fed] board’s statutory mandate.”

Republican lawmakers, however, have always opposed the Fed joining the coalition saying the central bank was overstepping its congressional mandate, which requires it to keep inflation stable and the job market strong.

They expressed concern that the Fed, which oversees the nation’s biggest banks, might try to discourage financial institutions from lending to oil, gas, and coal producers or other fossil fuel-intensive companies.

back to top

Sections

About Us

Connect With Us

Resources

Webinar:

Optimizing Payment Rails:
Smarter Solutions for Efficient Money Movement

Thursday, February 27 at 2:00 ET

Financial institutions are under pressure to deliver faster, more cost-effective, and user-friendly payment solutions. Smart routing and multi-rail optimization have emerged as key strategies to streamline payment processes and enhance the customer experience.

What You’ll Learn:

REGISTER NOW!

This webinar is brought to you by:

AlacritiBanking Exchange