Amid Policy Debate, New York Fed Floats Climate ‘Stress Test’ Framework

Researchers with the Federal Reserve Bank of New York are outlining a first-time method for banks to measure their climate-related “transition” risks by conducting “stress tests” that assess how they would fare in various climate mitigation scenarios, adding to the options for policymakers to consider as they develop finance-related climate policy. Three researchers at the Fed’s New York regional bank -- Hyeyoon Jung, Robert Engle and Richard Berner -- in a September report detail a methodology for banks to measure...