Tobias Adrian speaks at a Global Financial Stability Report news conference during the annual meetings of the IMF and World Bank Group in Washington, D.C., U.S., on Oct. 16, 2019. Climate change poses serious risks to the stability of the financial system, a senior International Monetary Fund official told CNN Business on June 3.
Adrian, a former official at the New York Federal Reserve Bank, pointed to how the economies of the Bahamas, Philippines and other nations have been crushed by hurricanes and typhoons in recent years. In March, researchers at the Federal Reserve wrote in a report that climate-related economic or financial risks may not necessarily impact financial stability, though they acknowledged that is a possibility under certain scenarios.
Treasury Secretary Janet Yellen said last month that she and President Biden are"committed to using the full power of the US federal government to address climate change." While the IMF is already conducting climate stress tests on some countries, such an evaluation would require regulatory or even legislative changes in the United States.Adrian also called for revamped standards for data and disclosure around climate risks to boost transparency.
Meanwhile, Adrian said regulators must do more work on how to regulate financial institutions in a way that makes the system more climate friendly."That is still in its infancy," he said.