(Bloomberg) -- A bill backed by Senator Elizabeth Warren and other Democratic presidential candidates would require big banks to conduct periodic “stress tests” to make sure they have the capital to withstand the future impacts of climate change.
The legislation introduced Wednesday comes amid growing concern about the economic impact of global warming -- rising temperatures, sea-level rise, water shortages and more frequent extreme weather patterns. A report by a UN climate change panel warned of $54 trillion in damages to the global economy by 2100 -- even if the world limits average global temperature rise to no more than 1.5 degrees Celsius.
Warren, along with presidential candidates Senators Michael Bennet, Cory Booker, Amy Klobuchar and Kamala Harris, signed onto a bill, the Climate Change Financial Risk Act of 2019, introduced by Senator Brian Schatz, a Democrat from Hawaii. The legislation would direct the Federal Reserve to conduct biennial climate stress tests requiring financial institutions with more than $250 billion in total consolidated assets to formulate a plan showing how they would evolve capital planning practices to limit the financial impacts of future climate risks.
“While our federal regulators are legally obligated to manage and reduce risks in the financial system, they have been ignoring the growing financial risks of climate change,” Schatz said.
COMING UP
Ten candidates have qualified for the fifth Democratic debate on Wednesday in Atlanta: Biden, Buttigieg, Sanders, Warren, Kamala Harris, Amy Klobuchar, Andrew Yang, Tulsi Gabbard, Cory Booker and Tom Steyer.
To contact the reporter on this story: Ari Natter in Washington at anatter5@bloomberg.net
To contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Max Berley
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