INVITED KEYNOTE: Improving US Banking Regulation in an Era of Climate Change

The increasing impacts of extreme weather and the growing awareness of the risks of climate change have led the US banking regulatory agencies to initiate efforts to determine how best to address possible significant weather and climate effects on the US banking system. Recent bank failures have shown the need for risk management practices that address a broad range of risks. Climate change should undoubtedly be included. The challenges in developing these regulations include acting in time to mitigate the risks of the rapidly changing climate while recognizing the significant uncertainties in our understanding of these changes. While the scientific community knows much about the physics and chemistry of climate change, there are considerable uncertainties in applying that knowledge to developing quantitative climate-related banking models and appropriate banking regulations. This presentation addresses significant scientific, technical, legal, and regulatory issues underlying climate-related banking regulation. It concludes with recommendations for what may come next in developing these regulations.