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

Risk Management
March 30, 2022

Summary:

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.

Distribution:

FDIC-Supervised Institutions

Suggested Routing:

Chief Executive Officer 
Chief Financial Officer

Attachment(s)
Statement by Acting Chairman Martin J. Gruenberg
Part 364 of the FDIC’s Regulations

Last Updated: March 30, 2022