US banks must consider climate risk: Fed's Powell
Washington (AFP) -
Risk from severe weather events is not usually linked to banks but increasingly must be included in their planning, the US central bank chief said Wednesday.
Federal Reserve Chairman Jerome Powell agreed that climate change is causing more extreme weather events, and said financial institutions the Fed supervises are required to factor that in, especially those in high risk areas.
He pointed to the impact of Superstorm Sandy which ravished the New York area in 2012.
"In a world where you have water lapping at the foot of the New York Fed, which is not that close to the water in downtown Manhattan, you know that you're going to need robust plans... to deal with severe weather events," Powell told a Senate committee.
The Fed looks at "cutting edge research" on the impact of climate on the economy.
"We do require financial institutions that we supervise to have a plan and an understanding to deal with severe weather events, particularly those in areas that are exposed to increased risk of severe weather," he said.