11.10.20
For the first time ever, the Federal Reserve (Fed) formally indicated within their biannual financial stability report that climate change is a threat to the stability of the financial markets. Within the report, the Fed warned that weather related incidents, such as wildfires and storms, caused by the changing climate could “add a layer of economic uncertainty and risk” that the Fed has only begun to incorporate in their analysis. While the Fed has formally called out climate change as an issue, they have not called on banks to address the issue leading some to speculate that the Fed is developing a policy to do so. Last week, Fed Chairman Jerome Powell indicated that they are “very actively in the early stages” of addressing the issue.