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Oct 21, 2021 · The Financial Stability Oversight Council released a report on climate change Thursday, outlining the danger that a warming planet will have on the financial future of the United States.
May 13, 2022 · How will climate change and policy-related uncertainty impact financial markets and in turn affect the macroeconomy via risk premia, the demand for safe assets, and the natural rate of interest? How will they impact households’ and firms’ savings and investment decisions?
Oct 21, 2021 · WASHINGTON — Climate change is an “emerging threat” to the stability of the U.S. financial system, top federal regulators warned in a report on Thursday, setting the stage for the Biden ...
Feb 7, 2024 · ALBANY, New York — New York has long pushed to rely on 70 percent renewable electricity by 2030. It’s clear now the state is no longer on track — derailed by growing costs, canceled projects...
- From Climate Change to Financial Risks
- Climate Risks and Financial Stability
- Illustrative Examples of Climate Risk Transmission
- Challenges to Understanding Climate-Related Risks
- Conclusion
- References
At a broad level, climate change refers to changes in the usual conditions of nature of the Earth's oceans, fresh water, and atmosphere.5These changes include, for example, increases in average global temperatures, the frequency and severity of major storms, and the level or acidity of oceans, among many other effects. There is a strong scientific ...
By themselves, climate-related economic or financial risks need not affect financial stability; the economy can experience a decline in output, and investors can experience losses, without these effects being amplified by the financial system. Under some conditions, however, these risks could increase financial-system vulnerabilities through losses...
Table 1 shows some illustrative examples of links between climate risks and financial stability risks. The risks described below may appear as combinations of vulnerabilities and shocks. Real estate: Under many climate projections, climate change leads to a further rise in sea levels and increase in storm surge.17 These effects, in turn, lead to in...
In principle, quantifying climate-related risks should be similar to quantifying other financial stability risks. In practice, however, climate-related risks face several challenges to measurement beyond those associated with conventional financial system vulnerabilities and potential shocks, and which will require investment to address. These clim...
This Note describes examples of financial stability risks arising from climate change, and how these risks can emerge as either shocks or vulnerabilities in the Federal Reserve's financial stability monitoring framework used in the Federal Reserve's Financial Stability Reports. Research to better understand the financial and financial stability ris...
Adrian, Tobias, Daniel Covitz, and Nellie Liang (2015). "Financial Stability Monitoring," Annual Review of Financial Economics, vol. 7 (1), pp. 357–95. Alok, Shashwat, Nitin Kumar, and Russ Wermers (2020). "Do Fund Managers Misestimate Climate Disaster Risk?" Review of Financial Studies, vol. 33 (March), pp. 1146–83. Amante, Christopher J. (2019). ...
Jul 19, 2021 · Public policies addressing, after years of delay, the fossil fuel emissions that are driving climate change could devalue energy companies and cause investments held by banks and pension funds...
Dec 17, 2021 · WASHINGTON — Federal regulators warned for the first time in an annual report to Congress on Friday that climate change was an “emerging threat” to the U.S. financial system, laying out how...
