CFTC Announces Formation of Climate-Related Market Risk Subcommittee
CFTC announced members of the new Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee (MRAC). The subcommittee was established to provide a report to the MRAC that will identify and examine the climate-related financial and market risks. Among others, the Subcommittee will work on issues related to disclosures, reporting, and stress testing of climate risks.
Bob Litterman, the founding partner and Risk Committee Chairman of Kepos Capital, will chair this 35-member Climate Subcommittee. The Climate Subcommittee comprises experts from the financial markets, the banking and insurance sectors, the agricultural and energy markets, the data and intelligence service providers, the environmental and sustainability public-interest sector, and the academic disciplines singularly focused on climate change, adaptation, public policy, and finance. Topics and issues this Subcommittee may consider include, but are not limited to, the following:
- 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 on sectors such as energy, insurance, real estate and on certain financial stability indicators.
Keywords: Americas, United States, Banking, Insurance, Securities, Climate Change Risk, ESG, Sustainable Finance, Reporting, Disclosures, Stress Testing, CFTC
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