There is no need for special treatment for weather-related risks in the Federal Reserve’s financial stability monitoring and policies, Fed Governor Christopher Waller said Thursday. Speaking at an economic conference In Spain, Waller said he did not doubt the science of climate change, “but my role is not to be a climate policy maker.”

Waller said climate change poses both potential physical risks, such as negatively affecting property values, as well as longer-term transition risks. As for the former, “there is a growing body of literature suggesting that economic agents are already adjusting behavior to take into account the risks associated with climate change,” he said. At the same time, banks are already well prepared to adapt to predictable and slow changes. “For example, if banks know that certain industries will gradually become less profitable or that assets pledged as collateral will be stranded, they factor this into their loan pricing, loan duration and risk assessments,” he said. he.

“As policymakers, we must balance the broad set of risks we face and have a responsibility to prioritize the use of evidence and analysis,” Waller said. “Based on what I’ve seen so far, I think there’s no need to focus too much on weather-related risks, and the Fed should focus on more near-term and material risks in line with our mandate.”

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