Board of Governors of the Federal Reserve System

While I support seeking public input on the climate-related principles published by the Board today, I believe it is critical that any final principles complement the existing supervisory framework supporting the safety and soundness of financial institutions, and that the Board consider the costs and benefits of any new expectations.

The Board has specific responsibilities, established by Congress, to supervise holding companies and banks, with a focus on the safety and soundness of these regulated institutions. The Board has long expected financial institutions to meet robust risk management standards as part of this mandate. The new principles contemplate additional obligations on firms to monitor and measure a broader set of climate-related risks, over indefinite time horizons. I look forward to public input on whether the guidance will improve safety and soundness at a reasonable cost, and how the guidance can better clarify supervisory expectations for firms.

The applicability of these principles is expressly limited in the proposal to large firms, excluding firms with less than $100 billion in assets. I believe this exclusion is appropriate based not only on the size of such firms, but also in light of the robust risk management expectations already applicable to such firms.

I look forward to reviewing comments from the public on this proposal. While I support seeking public comment, this vote does not indicate my support for the finalization of this guidance. I will evaluate any future recommendation to finalize this guidance on its merits.