The six large banks, including Bank of America, Citigroup, and Goldman Sachs, participated in the 2023 pilot conducted by the US central bank in order "to explore the resiliency of their business models to climate-related financial risks," the Fed said in a statement.
A summary of the exercise published Thursday said the banks "reported significant data and modeling challenges," due in part to "a lack of comprehensive and consistent data" on things like building characteristics and insurance coverage.
"Going forward, participants reported plans to capture additional data from clients, to source data from vendors, and to use proxies where necessary," the Fed report said.
The US central bank stressed that the "exploratory" exercise would not have any consequences for bank capital requirements, or lead to any supervisory changes.
Nevertheless, it marks a rare foray into the topic of climate change for the independent US central bank -- which has looked to avoid what is still a divisive political issue in the United States.
"We are not, nor do we seek to be, climate policymakers," Fed chair Jerome Powell said in a recent speech, adding that the US central bank should avoid "mission creep" and stick closely to its dual mandate from Congress to maintain stable prices and maximize employment.
The six banks which participated in the 2023 pilot now "plan to continue to invest in data, models, and expertise," according to the Fed's summary published Thursday.
This will allow them "to better identify, estimate, and monitor climate-related financial risks through the use of scenario analysis exercises and other tools,' the Fed said.
Barclays faces questions over climate and Gaza at AGM
Glasgow (AFP) May 9, 2024 -
Shareholders denounced Barclays for fossil fuel financing at the British bank's annual general meeting on Thursday, which also saw pro-Palestinian activists urge it to stop bankrolling arms in the war in Gaza.
The meeting saw about 30 demonstrators outside the venue in Glasgow carrying Palestinian flags and child-sized coffins calling for an immediate ceasefire.
Others criticised what they said were "climate crimes" and demanded an end to "financing fossil fuels".
In a letter, shareholders from the ShareAction group, which claims to be a "responsible investment" association, called on the bank to stopo financing fracking.
Hydraulic fracturing is a method used to extract natural gas and oil from deep rock formations, and is considered hazardous for the environment by climate activists.
The letter, written on behalf of "investors worth $1.24 trillion in assets under management", is asking Barclays to "commit to explicit restrictions on financing companies which are exclusively focused on fossil fuel extraction".
The group also calls on the bank to "make its fracking policy global to cover North America".
Barclays is regularly singled out by environmental defenders as one of the main hydrocarbon-financing banks in Europe.
In January, the European Central Bank said most major banks under its supervision had not yet brought their credit policies in line with the Paris climate agreement, exposing themselves to high transition risks.
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