Janet Yellen is interested in the example the Bank of England set in warning banks and insurers about the risks that climate change poses to their viability.
In congressional questioning Wednesday, the Federal Reserve chairwoman said “it is something that is certainly worth considering,” although not something the central bank has studied yet, as far as she knows.
Asked by Rep. John Delaney, D-Md.., if the Fed would work on the issue, Yellen responded that “it’s something we can get back to you on.”
That response was a diplomatic way of declining to make a commitment to the lawmaker. But Yellen said that Bank of England governor Mark Carney’s September speech on the risks of climate change to the financial system were “extremely interesting.”
In that speech, Carney warned that insurers and banks faced “potentially huge” losses if rules limiting the burning of fossil fules were adopted.
“Once climate change becomes a defining issue for financial stability, it may already be too late,” Carney told financial companies.
Yellen fielded a number of unusual questions in her appearance before the Joint Economic Committee. Typically, she does not stray far from topics relating to monetary policy and financial regulation in her prepared remarks. As a central bank, the Fed is generally more careful and guarded in its communications than the Bank of England.
