Calling the principles unnecessary and distracting, prudential federal banking regulators on Thursday announced the rescission of their 2023 interagency principles for climate-related financial risk management, which applied to institutions having more than $100 billion in consolidated assets.
The Federal Reserve Board, Federal Deposit Insurance Corp. (FDIC), and Office of the Comptroller of the Currency (OCC) said jointly that they “do not believe principles for managing climate-related financial risk are necessary because the agencies’ existing safety and soundness standards require all supervised institutions to have effective risk management commensurate with their size, complexity, and activities.” They said “all supervised institutions are expected to consider and appropriately address all material financial risks and should be resilient to a range of risks, including emerging risks.”
In their brief, draft notice for the Federal Register, the agencies also said they are concerned the principles “could distract from the management of other potential risks identified and addressed by financial institutions’ existing risk management processes and the agencies’ other risk management rules and guidance.”
The OCC announced it was ceasing participation in the principles in March. Upon publication in the Federal Register, Thursday’s announced rescission will be effective immediately, the agencies said.
Agencies announce withdrawal of principles for climate-related financial risk management
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