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UPDATE: Sen. Schatz Comments on Commodity Futures Trading Commission Meeting

June 12, 2019, 7:43 AM HST (Updated June 12, 2019, 10:54 AM)
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UPDATE: June 12, 2019, 10:10 AM

Today, US Sen. Brian Schatz (D-Hawai‘i), a member of the Senate Banking Committee and Chair of the Special Committee on the Climate Crisis, released the following statement after the U.S. Commodity Futures Trading Commission held its first public meeting on climate-related financial risks, where Commissioner Rostin Behnam announced he is working on creating a new Market Risk Advisory subcommittee focused exclusively on examining climate-related financial risks.

“It is very encouraging that the full commission recognizes the severity of the threat that is climate change and is taking steps to mitigate market risk,” said Sen. Schatz. “This is one of several signals we’ve seen just in the past week that the US financial community is worried about climate change, and I hope that worry, which is well-founded, continues to translate into action from our regulators, financial institutions and publicly traded companies.”

ORIGINAL POST: June 12, 2019, 7:43 AM

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US Sens. Brian Schatz (D-Hawai‘i) and Sherrod Brown (D-Ohio), members of the Senate Banking Committee, applauded Commodity Futures Trading Commissioner Rostin Behnam for leading a public meeting on climate-related financial risks, according to a June 12, 2019, press release from Sen. Schatz’s office.

The senators also called on all financial regulatory agencies to take the threat of climate-related risks seriously and act to mitigate those risks.

“Climate change impacts are likely to exacerbate market volatility, erode investor confidence, and increase the risk of financial crashes,” the senators wrote in their letter to Commissioner Behnam. “We strongly support your decision to assess climate-related risks to our financial markets and the impact on the stability of the global financial system. We encourage you to reach out to other financial regulatory agencies to urge them to follow your lead. We also encourage you to engage with the group of 36 international central banks and bank supervisors working together to develop analytic tools to assess climate-related financial risks.”

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Read the full text of the letter below:

Dear Commissioner Behnam:

We write to commend you for convening a public meeting on climate-related financial risks in your capacity as the sponsor of the Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee. As financial regulators around the world commit to addressing climate-related risks, it is encouraging to see the CFTC begin to prepare for the market risks that climate change will present. We hope our nation’s banking and securities regulators take note of your leadership on this issue and take steps to identify and manage climate-related risks within their own jurisdictions.

Climate change is increasing the frequency and severity of episodic severe weather events like droughts, floods, and wildfires; it is also changing long-term climate patterns in ways that will lower productivity, devalue and destroy fixed assets, stress agricultural yields, and ultimately affect every sector of our economy. The markets and market participants that the CFTC regulates will not be immune to these risks. Climate change impacts are likely to exacerbate market volatility, erode investor confidence, and increase the risk of financial crashes.

The CFTC will increasingly play an important role in identifying and helping market participants mitigate these emerging risks. We strongly support your decision to assess climate-related risks to our financial markets and the impact on the stability of the global financial system. We encourage you to reach out to other financial regulatory agencies to urge them to follow your lead. We also encourage you to engage with the group of 36 international central banks and bank supervisors working together to develop analytic tools to assess climate-related financial risks.

Thank you for your efforts to begin reviewing climate-related financial risks. We understand you cannot do this alone. All of our financial regulatory agencies and Congress must work together to build resilience to this looming threat in our economy and financial markets. We look forward to working with you on this going forward.

Sincerely,

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