An article in Bloomberg, “Climate change not ‘serious risk’ to financial stability, Fed’s Waller says,” quotes Christopher Waller, the Board Governor of the Federal Reserve Bank (the Fed) of the United States, saying that climate change does not pose a risk to the banking system of the United States. Waller is right. Similar assessments have been given by the Fed and other prominent bankers previously.
Climate change does not pose such “significantly unique or material” financial stability risks that the Federal Reserve should treat it separately in its supervision of the financial system, Fed Governor Christopher Waller said on Thursday in a detailed rebuttal of demands for climate initiatives by the U.S. central bank.
“Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States,” Waller told an economic conference in Spain. “Risks are risks … My job is to make sure that the financial system is resilient to a range of risks. And I believe risks posed by climate change are not sufficiently unique or material to merit special treatment.”
Banks are generally resilient, Waller said, able to adapt to changing conditions as long as they pay attention to the financial fundamentals. However, it is impossible to “predict, prioritize, and tailor specific policy around each and every shock that could occur.”
Waller’s comments confirm what analysts at the Federal Reserve Bank of New York previously stated. Weather disasters have not harmed banking system’s ability to operate or the profitability of individual banks. Local banks generally know the climate conditions of the regions in which they operate and understand which types of loans or financial instruments might be threatened by extreme weather, and plan accordingly.
In addition, Stuart Kirk, formerly the global head of responsible investment for international banking giant HSBC, said in 2022, that policy makers overstate the risk of climate change. The presentation where Kirk made that statement has been confirmed hundreds of times over in articles at Climate Realism. Kirk pointed out that an honest assessment of the available evidence suggests, “investors need not worry about climate risk.”
What’s true of investors is equally true of the banks they do business with.
Climate models are untrustworthy guides to future climate conditions. Increasingly banks recognize this. Let’s hope the general public begins to do so as well, and begins replacing politicians who advocate draconian climate policies that will make life less livable for everyone, except for the political elites profiting from them.
H. Sterling Burnett, Ph.D., is the Director of the Arthur B. Robinson Center on Climate and Environmental Policy and the managing editor of Environment & Climate News.
In addition to directing The Heartland Institute’s Arthur B. Robinson Center on Climate and Environmental Policy, Burett puts Environment & Climate News together, is the editor of Heartland’s Climate Change Weekly email, and the host of the Environment & Climate News Podcast.
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