CFTC Consults on Issues and Topics to Address Climate-Related Risks
CFTC is consulting on topics and issues being addressed by the Climate-Related Market Risk Subcommittee under the Market Risk Advisory Committee (MRAC). The consultation period ends on May 14, 2020. MRAC is a discretionary advisory committee established by CFTC in accordance with the Federal Advisory Committee Act. The Subcommittee was established to provide a report to the MRAC that will identify and examine climate change-related financial and market risks, including for derivatives markets.
The Subcommittee will provide its report directly to the MRAC and will not provide reports and/or recommendations to CFTC. The Subcommittee has no authority to make decisions on behalf of the MRAC and no determination of fact or policy will be made by the Subcommittee on behalf of CFTC. The Subcommittee may consider, but is not limited to, the following issues and topics:
- Identifying challenges or impediments to evaluating and managing climate-related financial and market risks
- Identifying how market participants can improve integration of climate-related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting
- Identifying policy initiatives and best practices for risk management and disclosure of financial and market risks related to climate change that support financial stability
- Identifying appropriate methods by which market participants' data and analyses can enhance and contribute to the assessment of climate-related financial and market risks and their potential impact in areas such as energy, insurance, real estate, and other financial stability indicators
- Identifying financial and market risks arising from potential economic policy responses to climate change
Related Link: Federal Register Notice
Comment Due Date: May 14, 2020
Keywords: Americas, US, Banking, MRAC, Climate Change Risk, Derivatives, Stress Testing, Governance, ESG, Disclosures, Scenario Analysis, Reporting, Sustainable Finance, CFTC
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James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
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