Economics

Powell Says Fed Likely to Require Banks to Test for Climate Risk

Jerome Powell speaks during a Senate Banking Committee hearing in Washington, D.C. on July 15.Photographer: Al Drago/Bloomberg
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The Federal Reserve will probably end up requiring banks to conduct tests to judge their vulnerability to the effects of climate change, Chairman Jerome Powell suggested on Thursday.

“My guess is that’s a direction we’ll go in but we’re not ready to do yet,” he told the Senate Banking Committee.