To keep your promise of meeting our climate goals and protecting the economy with an all-of-government effort, you must fill the remaining open Federal Reserve Board seats with leaders who will fulfill the Fed’s mission to mitigate climate-related financial risk. This is true of all three seats, and especially the Vice Chair for Supervision.
These open seats provide a critical opportunity to reform the Federal Reserve Board into a body that takes its full mission seriously, including climate risk.
Fed governors have a key role to play in steering the Fed to take immediate, necessary action to protect our financial system from climate change. Right now, the largest US financial institutions aren’t just failing to prepare themselves for climate harms, they’re actively increasing the threats by aggressively financing fossil fuels. It’s similar to the runup to 2008. This time, financial institutions are churning out toxic fossil fuel financing instead of toxic subprime mortgages. The 2008 financial crisis and Great Recession showed what happens when regulators fail to rein in Wall Street’s excessive risk-taking.
Congress passed legislation after the last financial crash requiring the Treasury Secretary to lead federal regulators to identify and respond to growing threats to financial stability. Climate change is clearly one such threat. Regulators must do their jobs and make Wall Street assess, absorb, and reduce the additional risks it is pumping into our financial system.
President Biden, I urge you to nominate leaders who will take action to stop Wall Street from fueling greater climate risks. Thank you.