S&C Financial Services partner Michelle Chen commented on the Federal Reserve’s recently proposed principles for large financial institutions’ climate-related financial risk management in Global Banking Regulation Review.
Michelle said that the proposed principles were consistent with those proposed earlier by the OCC and the FDIC and “demonstrate convergence by the banking regulators on climate risk management expectations for large financial institutions.”
She also said the Federal Reserve’s approach to exclude smaller banks and focus on larger banks is consistent with other areas of banking regulation, such as the application of enhanced prudential standards.
“That being said, in my view it would be prudent for smaller banks to monitor development of the guidance,” said Michelle. “It reveals the direction of banking regulators’ supervisory expectations on climate-related financial risk management, in particular supervisory expectations on board and management responsibilities.”
Read the article, Convergence on climate: Fed’s guidance mirrors OCC and FDIC.