No. Market forces will deal with these challenges and opportunities just as they have every other seismic shift in our world history.
US Federal or State Regulatory climate risk assessments will simply accelerate the demise of certain sectors of our economy, like oil & gas, pipelines, seaside resorts, etc...that are deemed not green enough. Too many banks, and I suppose insurance companies, will react to these regulatory concerns by reducing or eliminating their willingness to provide capital to sectors that are on the "avoid" list. It will be the 2006 CRE Guidance on steroids; meaning a self-fulfilling prophecy of the destruction of entire industries that would otherwise find their way to alternate products and business models, but at a time when the market stops providing a profit in their existing sectors. This will be worse because Washington regulators will be picking winners and losers.
It is worthwhile for banks to consider all manner of risks when deciding whether to provide capital, including potential climate impacts. But I am not sold yet on the premise that federal agencies have any better estimate of what impacts the climate will have on future business prospects than the businesses and people who are willing to risk their own capital.
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Scott Yeoman
President and COO
First American State Bank
Greenwood Village, CO
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-------------------------------------------
Original Message:
Sent: 02-25-2021 18:26
From: Barb Rehm
Subject: [Poll Question]: Do you agree with Federal Reserve officials who want to incorporate the risks posed by climate change into bank supervision?
------------------------------
Barb Rehm
Senior Managing Director
IntraFi Network
Arlington VA
------------------------------
US Federal or State Regulatory climate risk assessments will simply accelerate the demise of certain sectors of our economy, like oil & gas, pipelines, seaside resorts, etc...that are deemed not green enough. Too many banks, and I suppose insurance companies, will react to these regulatory concerns by reducing or eliminating their willingness to provide capital to sectors that are on the "avoid" list. It will be the 2006 CRE Guidance on steroids; meaning a self-fulfilling prophecy of the destruction of entire industries that would otherwise find their way to alternate products and business models, but at a time when the market stops providing a profit in their existing sectors. This will be worse because Washington regulators will be picking winners and losers.
It is worthwhile for banks to consider all manner of risks when deciding whether to provide capital, including potential climate impacts. But I am not sold yet on the premise that federal agencies have any better estimate of what impacts the climate will have on future business prospects than the businesses and people who are willing to risk their own capital.
------------------------------
Scott Yeoman
President and COO
First American State Bank
Greenwood Village, CO
------------------------------
-------------------------------------------
Original Message:
Sent: 02-25-2021 18:26
From: Barb Rehm
Subject: [Poll Question]: Do you agree with Federal Reserve officials who want to incorporate the risks posed by climate change into bank supervision?
Here is this week's poll, click here to vote.
Do you agree with Federal Reserve officials who want to incorporate the risks posed by climate change into bank supervision?
Yes, clearly bizarre weather like freezing temps in Texas pose risks we must account for
No, risk management is complicated enough already
------------------------------
Barb Rehm
Senior Managing Director
IntraFi Network
Arlington VA
------------------------------
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