The Federal Reserve’s Supervision Climate Committee is engaging with domestic stakeholders and other supervisors from a prudential perspective. Ultimately, I anticipate it will be helpful to provide supervisory guidance for large banking institutions in their efforts to appropriately measure, monitor, and manage material climate-related risks, following the lead of a number of other countries.
In addition, the Federal Reserve’s Financial Stability Climate Committee is assessing climaterelated risks to financial stability from a macroprudential perspective—that is, one that considers the potential for complex interactions across the financial system. Both the prudential and macroprudential work programs will benefit from the development of climate scenario analysis.