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Federal Reserve Governor Lael Brainard said on Tuesday that the Fed will establish a financial stability climate committee, as reported by Reuters.

Additional takeaways

“Fed’s new committee will approach climate risks to financial stability from a macroprudential perspective.”

“Fed needs a framework to address micro and macroprudential considerations on climate risk.”

“Climate scenario analysis may be a helpful tool to assess financial system risks.”

“Climate change could increase financial system vulnerabilities.”

“Climate change already imposing substantial economic costs.”

“Financial market participants who don’t address climate risks face losses.”

“Risk management, disclosures can ensure financial system resilience.”

“Mandatory disclosures on climate risk likely to be important.”

Market reaction

These comments had little to no impact on the greenback’s performance against its rivals. As of writing, the US Dollar Index was up 0.55% on the day at 92.25.