FDIC: Request for Comment on Statement of Principles for Climate-Related Financial Risk Management for Large Financial Institutions

WASHINGTON, March 30 -- The Federal Deposit Insurance Corporation issued the following financial institution letter (No. FIL-13-2022):

The Federal Deposit Insurance Corporation (FDIC) is requesting comment on draft principles that would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks. The draft principles are intended to support efforts by large financial institutions to focus on key aspects of climate-related financial risk management.

Statement of Applicability: Although all financial institutions, regardless of size, may have material exposures to climate-related financial risks, this Financial Institution Letter is intended for large financial institutions with over $100 billion in total consolidated assets.

Highlights:

* Weaknesses in how financial institutions identify, measure, monitor, and control the financial risks associated with a changing climate could adversely affect a financial institution's safety and soundness, as well as the overall financial system.

* The draft principles would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, consistent with the existing risk management framework described in existing FDIC rules and guidance.

* The draft principles will help financial institution management make progress toward addressing key questions as they consider incorporating climate-related financial risks into their institutions' risk management frameworks.

* The FDIC encourages financial institutions to consider climate-related financial risks in a manner that allows them to prudently meet the financial services needs of their communities.

Attachments:

* Request for Comment (https://www.fdic.gov/news/board-matters/2022/2022-03-29-notational-fr.pdf)

* Statement by Acting Chairman Martin J. Gruenberg (https://www.fdic.gov/news/speeches/2022/spmar3022.html)

Distribution:

* FDIC-Supervised Institutions

Suggested Routing:

* Chief Executive Officer

* Chief Financial Officer

Related Topic:

* Part 364 of the FDIC's Regulations (https://www.fdic.gov/regulations/laws/rules/2000-50.html)