Principles for Climate-Related Financial Risk Management for Large Financial Institutions
Summary
SIFMA and The International Swaps and Derivatives Association (ISDA), provided comments to the Board of Governors of the Federal Reserve System (FRB) on their request for feedback on the Principles for Climate-Related Financial Risk Management for Large Banks published in the Federal Register on December 8, 2022.
Excerpt
February 6, 2023
By electronic submission
Ann E. Misback
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW
Washington, DC 20551
Re: Principles for Climate-Related Financial Risk Management for Large Financial Institutions [Docket No. OP–1793]
Dear Ms. Misback:
The International Swaps and Derivatives Association, Inc. and Securities Industry and Financial Markets Association (collectively, the “Associations”)1 appreciate the opportunity to provide input on the Board of Governors of the Federal Reserve System
(the “FRB”) request for feedback on the Principles for Climate-Related Financial Risk Management for Large Banks (“Principles”) published in the Federal Register on December 8, 2022.2
We appreciate the FRB’s intent to closely align the proposed principles with the proposed climate-related financial risk consultations issued by both the Office of the Comptroller of the Currency (“OCC”) and Federal Deposit Insurance Corporation (“FDIC”). Given the intensifying pace of climate change, it is important to have a continuous dialogue with banking regulators to develop the best approach to the treatment of climate-related financial risks.
With a few exceptions that are set forth below, our comments on the proposed principles are similar to the comments we provided in response to the OCC and the FDIC’s proposals.3 The Associations support the OCC, FDIC and FRB’s (collectively, “agencies”) goal to ensure the safe management of banks’ exposures to climate-related financial risks. We support public sector efforts to establish regulatory principles and guidance surrounding climate-related financial risks that is consistent with the existing risk management operational framework.
1 Please see the Appendix for information regarding each Association.
2 87 Fed. Reg. 75267 (December 8, 2022) [hereinafter, “Proposal”].
3 Our respective comment letters are posted on ISDA’s website, available at: https://www.isda.org/2022/02/14/response-to-occ-on-principles-for-climate-related-financial-risk-management/; https://www.isda.org/2022/06/17/isda-and-sifma-respond-to-fdic-on-climate-related-financial-risk-management-for-large-banks/.