US Regulator Finds Banks Have Work to do on Climate Risk, Sources Say

A top U.S. banking regulator has found that major lenders are in the early stages of assessing and managing the risks climate change poses to their businesses, and that significant work is needed in some areas, three people familiar with the matter said. The Office of the Comptroller of the Currency conducted a review last year including 22 large banks to see how they account for the impact of climate change on their loan books and businesses. In a letter sent in recent days to the banks’ chief executives, the OCC said it found all had completed some level of risk identification, but approaches and stages of development varied widely. The letter, the contents of which were described to Reuters by sources, has not been previously reported. It sheds more light on the shortcomings regulators have identified in many banks’ preparations to manage climate risks, which some industry experts argue puts trillions of dollars of assets in jeopardy.

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