Michael Barr discusses climate risk and banking regulation

The US Federal Reserve has acknowledged the financial risks posed by climate change, particularly in light of recent natural disasters such as the California wildfires. Vice Chair for Supervision Michael Barr emphasized the need for the Federal Reserve to focus on climate-related risks to ensure the safety and soundness of banks. The pilot climate scenario analysis conducted was highlighted as an important step in assessing the impact of severe weather events on financial stability and guiding banks in their risk management practices.