U.S. Treasury Secretary Janet Yellen says she will lead an effort by top U.S. regulators to assess the potential risks that climate change poses to America’s financial system, part of a broad initiative launched by the Biden administration.
Yellen said the regulatory review, which will be conducted by the Financial Stability Supervisory Board, will examine whether banks and other lending institutions are properly assessing the risks to financial stability. He chairs the committee, including the Treasury, the Federal Reserve, the Securities and Exchange Commission and other financial regulators.
“Currently the financial system is not producing reliable disclosures,” Yellen said in remarks prepared for the Venice International Climate Conference and release in Washington.
As part of President Joe Biden’s whole-of-government approach, Yellen said, the council will examine what should be done to improve current regulations on financial climate-related 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 efforts could lead to increased regulatory oversight that will drive up banks ’cost of doing business and reduce their ability to make loans.
Yellen said the United States also intends to engage support from the IMF, World Bank and other multilateral development banks to focus more resources on combating climate change. The World Bank and the regional development banks are leading sources of loans used by poor nations for dams and other development projects.
“Developing countries are particularly vulnerable to climate change and poverty, food security and health outcomes affected by extreme weather shocks,” Yellen said.
He said the administration is supporting international efforts to mobilize $ 100 billion annually from a variety of public and private sources to support efforts by developing countries to combat climate change.
Yellen said she planned to convene a meeting of the heads of international institutions to discuss ways to better align their efforts with the Paris climate agreement. The Trump administration pulled the United States out of the Paris climate agreement, but Biden overturned that decision after taking office this year.
Since taking over as Treasury Secretary, Yellen has been one of the administration’s leading voices in strengthening the government’s efforts to combat climate change.
The administration is also making a major push to include large investments to slow global warming in the multi-million dollar infrastructure spending measures Biden is pushing Congress to approve. This effort ran in opposition to the Republican and various Biden climate initiatives from a bipartisan unit infrastructure measure.
The environment says a major Democratic-only package that is currently developing needs to meet Biden’s ambitious climate promises such as moving the country to carbon-free production of electricity and becoming a global leader in the use of electric vehicles and the creation of millions of jobs. in solar, wind and other clean energy industries.
The Venice International Climate Conference on Sunday follows a meeting of finance officials from the group of 20 major economies in Venice on Saturday. This group backed a rapid review of international taxation including a 15% global minimum tax on corporations to discourage large companies from seeking out low tax rates.
The measure is scheduled to be a key agenda item when Biden and other G-20 leaders meet for a summit in Rome on October 30-31.