During the pandemic, most countries forgot about the climate change that seriously affects the health of our planet. In fact, there is no wonder, as the whole world has been focused on financial issues. At the same time, such knotty problems as global warming and climate change could become the last straw that broke the camel's back.
Climate change poses a “slow motion” systemic threat to the stability of the US financial system that is a basis for the global one. This issue is spreading panic among financial experts. The recent report prepared by the US Commodity Futures Trading Commission revealed that the US financial system required urgent actions from financial regulators, including the Federal Reserve and the Securities Exchange Commission.
“The physical impacts of climate change are already affecting the United States, and the transition to net-zero emissions may also impact many segments of the economy,” the report said.
A shift in the structure of energy consumption could bring a sudden drop in asset prices. At the same time, expenses on building a green economy will only rise. That is why analysts suppose that it is important to stress test community banks for their resilience to climate changes.
