Regulators are doing away with controversial rules that required banks to plan for losses in the event of climate-related events, according to an announcement Thursday.
A joint release from the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve said they no longer believe the requirements are necessary as they are redundant with other provisions banks make to plan for emergencies and unusual events.
“The agencies do not believe principles for managing climate-related financial risk are necessary because the agencies’ existing safety and soundness standards require all supervised institutions to have effective risk management commensurate with their size, complexity, and activities,” a joint release from the three regulators said.
Fed Governor Michael Barr, the former vice chair for supervision, issued a statement disagreeing with the move.
“Rescinding the principles is shortsighted and will make the financial system riskier even as climate-related financial risks grow,” Barr said in a statement.
