The Fed downplays the chance that it will limit banks from oil and gas lending.

The Fed downplays the chance that it will limit banks from oil and gas lending.

The Fed downplays the chance that it will limit banks from oil and gas lending.The U.S. Federal Reserve in November last year.Credit...Stefani Reynolds for The New York TimesBy Jeanna SmialekJan. 27, 2021, 8:43 a.m. ETTop Federal Reserve officials downplayed the chance that they would use their power as bank overseers to actively discourage investment in carbon-heavy companies, setting out a boundary line in an evolving conversation about what role the central bank should play in dealing with the fallout from global warming.“We would note that it has long been the policy of the Federal Reserve to not dictate to banks what lawful industries they can and cannot serve, as those business decisions should be made solely by each institution,” Jerome H. Powell, the Fed's chair, and Randal K. Quarles, the vice chairman for supervision, wrote in a letter this month.Their comments came in response to a letter sent by Representative Andy Barr, Republican of Kentucky, and several of his colleagues that raised concerns about the central bank's recent attention to climate change.Mr. Powell and Mr. Quarles said the Fed makes sure the institutions it oversees are well-prepared to handle risks they face, including climate-related risks. But they indicated that they