Ahead of Trump’s presidency, the Fed withdraws from the Global Climate Network

The Federal Reserve has withdrawn from the network of global financial regulators focused on climate risks days before President-elect Donald J. Trump returns to power.

The Central Bank announced this Join officially network in December 2020, shortly after the election of President Biden. The decision was met with praise from Democrats and skepticism from Republicans, who expressed concern that increased attention to climate risks by financial regulators could have harmful effects on U.S. bank customers.

The group, known as the Network of Central Banks and Supervisors on Greening the Financial System, exists to help central banks and other regulators share ideas and research as they work out how to account for climate-related risks in the financial sector. The network also aims to “mobilize mainstream finance to support the transition towards a sustainable economy.”

Federal Reserve officials said that the decision to leave the network came after the expansion of the group’s work.

“While the Board expressed its appreciation for engaging with NGFS and its members, the scope of NGFS’s work has increasingly broadened, covering a broad range of issues that fall outside the Board’s statutory mandate,” the Fed said in a statement. statement Friday.

The network did not immediately respond to a request for comment.

Five members of the Federal Reserve Board of Governors They voted to withdraw From the network, including Federal Reserve Chairman Jerome Powell. Two members abstained from voting, including Adriana Kugler and Michael Barr, who recently announced he would do so. Step down From his position as Vice President for Oversight by February 28.

The central bank’s move to join the network was seen as a sign of its awareness that the Fed must start taking into account the impact of extreme weather events because they occur more frequently and pose a greater risk to the financial system. The Fed had been participating in the network informally for more than a year before officially joining.

Days before the Fed officially joined, a group of Republican lawmakers expressed doubts about the Fed’s participation in the network. Its recommendations “could significantly limit access to capital for critical industries and place harmful restrictions on regulated entities,” Republican lawmakers wrote in their report. message To Fed officials in December 2020.