Fed Governor Waller: Climate Change and Financial Stability

Christopher J. Waller, Federal Reserve Governor, discussed the potential risks that climate change could pose to the financial system at a conference in Madrid, Spain on May 11, 2023. His talk focuses on financial risks and tackles whether the financial risks associated with climate change are different enough from other financial stability risks to merit special treatment.

Waller starts his talk with "Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States." He does not see any near-term or material enough climate-related risk that threatens the financial stability or economic development of the U.S. Therefore, there is no need for special treatment for climate-related risks in our financial stability monitoring and policies.

Waller discusses physical and transition risks posed by climate changes and states the important role of continued high-quality academic research regarding the role that climate plays in economic outcomes.

The full transcript can be found at https://www.bis.org/review/r230515b.pdf

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