WASHINGTON, Sept 25 (Reuters) – Elizabeth Warren, Bernie Sanders and 4 different U.S. senators are pressuring the U.S. Treasury Division to step up oversight and provide extra steering to monetary establishments on addressing local weather change dangers threatening the U.S. monetary system.
In a letter despatched to the Treasury final week, Democratic senators Warren, Martin Heinrich, Edward Markey, Sheldon Whitehouse and Jeffrey Merkley, in addition to Sanders, an impartial, welcomed the division’s work on the problem thus far however known as for “added urgency” given growing dangers.
The Treasury ought to act now – together with by means of its position as head of the multi-regulator Monetary Stability Oversight Council (FSOC) – to handle systemic dangers changing into evident in a crash in coastal property values, insurance coverage market failures, and uninsurable wildfire dangers, they mentioned.
“As local weather monetary impacts develop, the Local weather Hub and Treasury should pursue with added urgency all obtainable measures to handle the local weather disaster and its risk to the soundness of our monetary system,” the senators wrote within the Sept. 20 letter, which was first reported by Reuters.
A Treasury spokesperson didn’t reply to any particular considerations raised by the senators, however underscored the division’s dedication to tackling local weather change.
“Underneath Secretary Yellen’s management, the Treasury Division has been on the forefront of addressing the local weather disaster. From implementing the clear power provisions of the Inflation Discount Act to unlocking billions in private and non-private financing, combating local weather change stays a high precedence for the division.”
The senators known as on Treasury Secretary Janet Yellen and newly appointed climate counselor Ethan Zindler, a local weather and clear power analysis government, to do extra to guard the U.S. economic system from what Yellen has described because the “existential risk” posed by local weather change.
Latest local weather disasters and monetary disruptions have underscored the rising value and affect of local weather change, with one examine displaying solely 40% of direct weather-related costs suffered worldwide in 2022 had been coated by insurance coverage suppliers.
The senators mentioned they had been notably involved about nonbank monetary establishments, which additionally performed a essential position within the 2008 world monetary disaster, and mentioned the FSOC ought to finalize and instantly implement a brand new analytic danger framework for climate-related monetary dangers.
The Treasury must also develop higher local weather danger situation workout routines for banks, and make sure that all FSOC members can entry information gathered by Treasury’s Local weather Information and Analytics Hub below a pilot undertaking launched in July 2022, they wrote.
The senators welcomed the Treasury’s new voluntary principles for “net-zero” financing commitments, however mentioned there have been gaps within the steering and that the division ought to clarify all giant monetary establishments ought to have a reputable transition plan.
In addition they repeated earlier requires stronger Inside Income Service enforcement of guidelines on political exercise by nonprofit organizations, citing efforts by particular pursuits to gas local weather change denial, and investigations into how such funding could possibly be obstructing extra motion on the local weather disaster.
Reporting by Andrea Shalal, modifying by Deepa Babington and Chris Reese
Our Requirements: The Thomson Reuters Trust Principles.