The Federal Reserve Board has announced that six of the nation’s largest banks will participate in a pilot climate scenario analysis exercise. This is designed to enhance the ability of supervisors and firms to measure and manage “climate-related financial risks.”
The pilot exercise will be launched in early 2023 and is expected to conclude around the end of the year. At the beginning of the exercise, the Board will publish details of the climate, economic, and financial variables that make up the climate scenario narratives.
The banks in the pilot exercise are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. In the coming months, the Board will provide additional details on how the exercise will be conducted and the scenarios that will be used in the pilot, according to The Federal Reserve’s official government website.