In a speech on March 23, Federal Reserve (Fed) Governor Lael Brainard announced the formation of the Financial Stability Climate Committee. The move reaffirms the government’s commitment to assessing the risks that climate change poses to the financial system, which was echoed by Fed Chairman Jerome Powell during a Congressional hearing this week. Brainard stated the committee will address, “not only potential climate shocks, but also whether climate change might make the financial system more vulnerable in ways that could amplify these shocks and cause broader knock-on effects that could harm households, businesses, and communities.” Brainard also reinforced the need for transparency among market participants about the risks they are facing from climate change.

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