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ABA-Brainard Hints at New Guidance as Fed Develops Climate Scenario Analysis.

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ENPNewswire-October 11, 2021--ABA-Brainard Hints at New Guidance as Fed Develops Climate Scenario Analysis

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Release date- 08102021 - The Federal Reserve is working to develop a scenario analysis through which banks can model the potential risks associated with climate change and assess their ability to manage those risks, Federal Reserve Governor Lael Brainard said at an industry event today.

Acknowledging the challenges of conducting such an analysis and noting 'we should be humble about what the first generation of climate scenario analysis is likely to deliver,' Brainard nevertheless underscored the importance of taking this 'rudimentary' first step.

'The future financial and economic consequences of climate change will depend on the severity of the physical effects and the nature and speed of the transition to a sustainable economy,' she said. 'So it is important to model the transition risks arising from changes in policies, technology, and consumer and investor behavior and the physical risks of damages caused by an increase in the frequency and severity...

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