US Federal Reserve blocks push for climate risk focus in financial rules
According to a Bloomberg report, the U.S. Federal Reserve has intervened to prevent a proposal by the Basel Committee on Banking Supervision that would have elevated climate risk as a key focus of financial regulations. The proposal suggested that banks disclose detailed information about the impact of climate change on their operations beginning January 2026, aiding investors and regulators in assessing risk management.
While the European Central Bank (ECB) advocated for additional measures requiring banks to disclose strategies for meeting climate commitments, US officials raised concerns that the watchdog was exceeding its mandate.
The resistance echoes broader pushback against stringent climate disclosure requirements among US firms, evident in a recent lawsuit filed by 10 Republican-led states against the Securities and Exchange Commission’s new rules mandating climate-related risk reporting for US-listed companies.
Critics argue that such proposals prioritize political agendas over prudent financial oversight. However, proponents assert that comprehensive disclosures are essential for curtailing financing to the fossil fuel industry and aligning investments with sustainability goals.
The Basel Committee, comprising central banks and banking regulators, crafts overarching rules for member institutions. Yet, any consensus reached must gain approval from regulators and legislators in individual jurisdictions.
The ECB, the Federal Reserve, and the Basel Committee declined to comment on the Bloomberg report according to Reuters.
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