WASHINGTON, Jan 25 (Reuters) - The U.S. Federal Reserve is tapping a senior official to lead a new team focused specifically on financial risks posed by climate change, the central bank announced Monday.
Kevin Stiroh, who previously led bank supervision at the New York Fed, will lead the newly-formed “Supervision Climate Committee,” which gathers senior Fed officials to study what climate change could mean for banks and financial markets.
The move is the latest indication that the Fed is honing in on climate change as an area to closely monitor for potential risks to the financial system. In December, the Fed announced it had joined an international central bank group devoted to climate change. The central bank said in November for the first time that climate change could pose financial stability risks.
“The SCC will build on our climate change work already underway across the Federal Reserve System, and help us take a careful, thoughtful, and transparent approach to analyzing these potential risks,” said Fed Vice Chairman Randal Quarles in a statement.
In remarks to a risk management conference in November, Stiroh listed climate change as a potential shock - alongside recessions, geopolitical events and bad actors - posing risks to the banking system. “The purpose of bank supervision is to ensure that supervised firms are resilient to all of these risks,” he said.
The New York Fed said it will launch a formal search for Stiroh’s replacement in the coming weeks. (Reporting by Pete Schroeder; Editing by David Gregorio)
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