September 29, 2022

Toomey on Fed’s New “Pilot Climate Scenario Analysis”: A Stress Test By Another Name

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) released the following statement after the Federal Reserve (Fed) announced a “pilot climate scenario analysis exercise” with six of the nation’s largest banks.

“The Fed’s new ‘pilot’ program is the first step toward pressuring banks into limiting loans to and investments in traditional energy companies and other disfavored carbon-emitting sectors. There is no risk from global warming that banks aren’t already fully capable of pricing into their decisions, and the Fed’s intrusion into this process only underscores that the real risk is government.”

“The real purpose of this program is to ultimately produce new regulatory requirements. While the Fed can call this pilot program by whatever name it may prefer, it sounds exactly like a stress test to me.”