Fed’s Climate Scenario Analysis For Banks Finds Major Analysis Hurdles

The Federal Reserve in a summary of its pilot program for climate change “scenario analysis” for banks is finding major hurdles in analyzing such risks, potentially complicating any subsequent attempt by financial regulators to address these risks. Large banks that participated in the pilot program “reported significant data and modeling challenges in estimating climate-related financial risks,” the Fed writes in a May 10 report summarizing the findings from the exercise. The central bank worked with six of the nation’s largest...