WASHINGTON: The Federal Reserve is moving closer to joining an international group of central bankers working to understand and reduce climate change risk, paving the way for the world’s most influential central bank to help shape global financial markets’ response to a warming world.
Fed Chair Jerome Powell said the US central bank had been working with the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), and had been attending meetings. “I think we are in the process of applying for membership there now’’, he said.
Fed Governor Randal Quarles told lawmakers in testimony, “We have requested membership’’, adding, “I expect that it will be granted.”
The NGFS has not yet received an official letter of application laying out the Fed’s motivation for joining and its areas of interest, as required by the organisation’s charter, NGFS Secretariat head Morgan Despres said on Friday. But the US central bank has been in talks for months with the group about what it needs to do to join and the workload being a member would entail, he said.
Fed staff have also been invited to take part in a couple of workstreams, including one on sizing up the impact of climate change on the economy and financial stability, and another on bridging data gaps, Despres said.
The Fed is the only major global central bank besides the Reserve Bank of India that is not a member of the NGFS.
The Fed would bring its expertise as regulator and interest-rate setter for the world’s biggest economy and center of global capital markets, as well as its deep bench of research economists, some of whom have been delving into climate-change topics in recent years. — Reuters
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