Flashback 2021: Treasury Secretary Janet Yellen reveals stupidity of U.S. financial policy: Climate change poses ‘existential threat’ to financial markets


By: - Climate DepotMarch 9, 2022 12:46 PM

https://www.politico.com/news/2021/03/31/yellen-climate-change-fsoc-478769

Treasury Secretary Janet Yellen on Wednesday called climate change “an existential threat” and the biggest emerging risk to the health of the U.S. financial system, pledging to marshal regulatory forces to guard against its harmful effects.

Yellen made the promise during her inaugural appearance as the head of the Financial Stability Oversight Council, a panel of top regulators tasked with policing Wall Street behavior that has the potential to crash the entire economy.

“We cannot only look back and learn the lessons of last year,” Yellen said at that meeting. “We must also look ahead, at emerging risks. Climate change is obviously the big one.”

Yellen’s decision to put climate change at the top of the group’s agenda underscored the escalating attention financial regulators are devoting to the economic impacts of global warming and rising sea levels. The SEC is considering new climate disclosure rules for public companies. The Fed is intensifying scrutiny of banks’ exposure to climate-related risks.

“We know that storms will hit us with more frequency, and more intensity,” Yellen said. “We know warming temperatures might disrupt food and water supplies, leading to unrest around the world. Our financial system must be prepared for the market and credit risks of these climate-related events.”

At the meeting, the heads of independent U.S. financial regulators, some of which are still run by appointees of President Donald Trump, underscored the steps each of them were taking to better understand how financial assets and institutions in different regions might be hurt by severe weather events. They acknowledged how losses in those areas could feed out into financial markets, though modeling such outcomes is complex.

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