With respect to climate change risks, it is important to think carefully about the costs and benefits of any guidance and the scope such guidance may include. As proposed, the climate risk-management guidance would apply only to the largest firms. Of course, all banks below this threshold, including small banks, would remain subject to robust risk-management expectations, which includes managing all material risks.
In many instances, these expectations may require banks to manage a range of related risks, especially from extreme weather and natural disasters. Capital. As you know, the banking agencies are currently engaged in a holistic bank capital standards review and are working to implement the Basel III “endgame” reforms.