Wall Street sees first Fed climate change review in 2023 – Reuters

Wall Street sees first Fed climate change review in 2023 – Reuters

WASHINGTON, Nov 17 (Reuters) - While the U.S. Federal Reserve trails other major central banks in tackling climate change, it's catching up on a critical front: figuring out if rising temperatures could topple a major bank or even the entire financial system.

The potential effects of climate change - namely through rising sea levels, worsening floods and fires, and government policies transitioning away from carbon-heavy industry - could destroy trillions of dollars of assets around the globe. As major lenders to the oil and gas industry, U.S. banks could be in the eye of the storm, according to regulators and risk management experts.

A U.S. Treasury Department-led report warned last month that rising temperatures were an "emerging threat" to financial stability and said regulators should use scenario analyses to build robust predictive risk-management tools.