The Financial Stability Oversight Council will examine what should be done to improve current regulations on climate-related financial disclosures.
WASHINGTON — U.S. Treasury Secretary Janet Yellen says she will lead an effort by top U.S. regulators to assess the potential risk that climate change poses to America’s financial system, part of a wide-ranging initiative launched by the Biden administration. Yellen says the regulatory review, which will be done by the Financial Stability Oversight Council, will examine whether banks and other lending institutions are properly assessing the risks to financial stability. She chairs the committee, which includes Treasury, the Federal Reserve, the Securities and Exchange Commission and other financial regulators. “The current financial system is not producing reliable disclosures,” Yellen said in remarks prepared for the Venice International Conference on Climate and released in Washington. As part of President Biden’s whole-of-government approach, Yellen said, the council will examine what should be done to improve current regulations on climate-related financial disclosures. The council was created by Congress in 2010 to improve regulatory coordination in the wake of the 2008 financial crisis. Banking executives are concerned that the administration’s effort could lead to increased regulatory oversight that will drive up banks’ cost of doing business and lessen their ability to make loans.
