The U.S. is proposing that the Task Force on Climate-related Financial Risks (TFCR) at the Basel Committee on Banking Supervision (BCBS) be downgraded to a working group, the Financial Times reported on Friday, citing sources briefed on the matter.
The Basel Committee is the top global regulator of the banking sector, and its 45 members comprise central banks and bank supervisors from 28 jurisdictions. For the United States, the representatives on the committee are four institutions – the Fed, the Federal Reserve Bank of New York, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
In a sign of the continued retreat from climate issues of the Trump Administration, the U.S. regulatory bodies on the Basel Committee have proposed downgrading the task force, and debates on the matter are on the agenda for a meeting of the committee on Monday, according to FT’s sources.
The task force was created in 2019 and has published several proposals for the assessment of climate-related risks in the financial sector since then.
It is likely that the European Central Bank (ECB) and other European members on the Basel Committee oppose the American proposal of diluting the task force into a working group.
Earlier this year, reports emerged that the US Federal Reserve had blocked an attempt led by the ECB to make climate risks a pillar of global rules for banks and require them to report their strategies on meeting climate commitments.
Members of the Fed have expressed in closed-door meetings at the Basel Committee on Banking Supervision (BCBS) concerns about such rules because they believe the committee might be overreaching with this particular supervision, according sources who spoke to Bloomberg. The Fed officials also feel they have a narrow mandate in this area to regulate climate risk disclosures from the Wall Street banks, the sources added.
By Tsvetana Paraskova for Oilprice.com
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