Climate change not ‘serious risk’ to financial stability, Fed’s Waller says

Written by Adam Cadle

22/05/2023

The issue of climate change does not pose such “significantly or material” financial stability risks that the Federal Reserve should treat it separately in its supervision of the financial system, Fed Governor Christopher Waller has said.

Speaking at an economic conference in Spain, Waller said climate change “is real”, but said he does not believe “it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States”.

“Risks are risks… My job is to make sure that the financial system is resilient to a range of risks. And I believe risks posed by climate change are not sufficiently unique or material to merit special treatment.”

Waller stated that “transition risks” to a lower-carbon economy, meanwhile, “are generally neither near-term nor likely to be material given their slow-moving nature and the ability of economic agents to price transition costs … There seems to be a consensus that orderly transitions will not pose a risk to financial stability.”

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