The Federal Reserve says six US banking giants reported having 'significant' challenges when estimating the financial risks from climate change because of a lack of good data. — Reuters file picWASHINGTON, May 10 ― Six US banking giants reported having “significant” challenges when estimating the financial risks from climate change because of a lack of good data, the Federal Reserve said yesterday.
A summary of the exercise published yesterday said the banks “reported significant data and modelling challenges,” due in part to “a lack of comprehensive and consistent data” on things like building characteristics and insurance coverage.“Going forward, participants reported plans to capture additional data from clients, to source data from vendors, and to use proxies where necessary,” the Fed report said.
Nevertheless, it marks a rare foray into the topic of climate change for the independent US central bank ― which has looked to avoid what is still a divisive political issue in the United States.“We are not, nor do we seek to be, climate policymakers,” Fed chair Jerome Powell said in a recent speech, adding that the US central bank should avoid “mission creep” and stick closely to its dual mandate from Congress to maintain stable prices and maximize employment.