Banking Regulators’ Decision to Ignore Climate-Related Financial Risk Endangers Main Street Americans and Financial Stability

WASHINGTON, D.C.— Dennis Kelleher, President, CEO, and Co-founder, issued the following statement in response to the Office of the Comptroller of the Currency’s (OCC) announcement to withdraw from interagency guidance that held the largest banks accountable for managing climate-related financial risk.

“The OCC’s decision to ignore well-known and very serious climate-related financial risk at the largest Wall Street banks is a baseless, dangerous and politically-motivated decision. Banks face enormous risks from climate, but are woefully unprepared to even evaluate those risks, much less actually do something about them to maintain their safety and soundness, let alone broader financial stability. Simply put, banks must consider all risks, regardless of source, not just those that are approved by those prevailing political winds.

“Ironically, this announcement comes on the same day that Wall Street banks themselves warned of catastrophic climate risk. Moreover, results from the Federal Reserve’s climate scenario analysis last year showed shockingly deep and broad deficiencies in basic risk management at the largest banks related to climate as well as inadequate regulation, management, and preparation to deal with those risks at the banking regulators.

“Today’s decision by the OCC is only the latest in a long list of irresponsible actions related to climate-related financial risk. Ignorning the risk doesn’t make it disappear; ignoring the risk actually makes the financial system less safe and more prone to bank failures and bailouts.  The American people deserve—and the financial system requires—regulators who ensure banks are taking all risks into account, regardless of the source. Regrettably, today’s regulators are repeatedly failing to fulfill their most basic missions and mandates to do that; history will judge them harshly and deservedly so.”

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