(Reuters) – Federal Reserve Chair Jerome Powell on Thursday said the U.S. central bank is looking into using climate stress scenarios to make banks more aware of and resilient to ever-more-frequent severe weather events, and could go in that direction.
Climate stress scenarios, as distinct from regular stress tests, are “proving to be… a very profitable exercise, both for the financial institutions and for regulators” in Europe where central banks have begun using them, Powell told the Senate Banking Committee.
“We haven’t decided to do that yet. We are in the process of looking very carefully at that. My guess is that’s a direction well go in, but we are not ready to do that yet.”
Reporting by Ann Saphir; editing by John Stonestreet
