Climate change

JPMorgan Chase, Morgan Stanley and Bank of America threatened to leave climate group NZBA late last year if limits on their fossil-fuel activities were imposed, concerned that they would be legally bound, according to people familiar with the process.

Six large banks will have to estimate the impact of a major hurricane in the Northeast and one other climate disaster on their real estate portfolios. Policy-related risks will also be explored.

With prodding from their regulators, U.S. banks made some progress on assessing climate risk, but did not move as quickly as activists wanted. At the same time, new federal support for clean energy provided opportunities for lenders.

The state's Department of Financial Services issued proposed guidelines on how banks and mortgage lenders should manage climate-related risks. But the guidance was quickly slammed by a trade group representing community banks.

The Federal Reserve Board of Governors voted 6-1 to seek public comment on a new regulatory framework for climate-related financial risks. The requirements would add to existing risk management standards.

Dianne Dobbeck, head of the Federal Reserve Bank of New York's supervision group, said the banking system is sound, but potentially destabilizing risks must be monitored and addressed.

The growing anti-ESG backlash from Republican lawmakers may please the base, but as a practical policy it creates far more problems than it solves.

Acting Chairman of the Federal Deposit Insurance Corp. Martin Gruenberg said regulators won't tell banks who to lend to, but the government won't be there if their investments go bad.

A half-dozen of the largest banks in the country will participate in the Federal Reserve's climate scenario analysis exercise next year. Findings from the program will inform supervision policies on managing climate and transition risks.

The operational melding of highly regulated banks and less-regulated fintechs led acting Comptroller of the Currency Michael Hsu to warn of the potential for another financial crisis.

With taxpayer dollars and creative deals, these nonprofit funding institutions can help recruit private-sector capital off the sidelines and into underserved markets, leveraging as much as $8 in private funding for every $1 that comes from the government.

The House passed the legislative package, which includes an excise tax on stock buybacks, in a 220-207 vote.

The Biden administration is poised to put its stamp on the banking regulatory landscape, but there are few slam-dunk solutions that will satisfy both the industry and a vocal Democratic base.

Jonathan Fink will be associate chief counsel, while Patricia Grady will serve as deputy chief counsel. Fink has been a leading public face on climate risk at the agency in recent months.

The HSBC Holdings executive at the center of a row over climate change risks has resigned from the bank as he issued a broadside against corporate “cancel culture.”

Europe’s landmark test of banks’ resilience to global warming was far softer than many lenders had expected, according to people familiar with the matter.

In its semiannual risk report, the Office of the Comptroller of the Currency said it was working to provide clarity on the legality and soundness related to digital assets.

A report from the Roosevelt Institute published Monday urges Biden’s bank regulators to address climate risks through supervisory guidance, a move unlikely to garner support from banks. 

Regulators must be cognizant of any threat that could harm the financial sector while resisting the urge to overstep their authority to set policy that should be decided by Congress.