The U.S. Financial Stability Oversight Council (FSOC), chaired by Treasury Secretary Scott Bessent, voted this week to disband two panels devoted to assessing climate-related risks to the financial system, marking a sharp departure from the Biden-era push to integrate climate policy into financial regulation.
At its Sept. 10 meeting, the FSOC rescinded the charters of the Climate-related Financial Risk Committee and its external advisory body, the Climate-related Financial Risk Advisory Committee (CFRAC). The decision, approved in open session, effectively ends a two-year experiment in embedding climate-related risks into the council’s systemic risk framework.
The panels had been created in 2023 under former Treasury Secretary Janet Yellen, who sought to bring climate-related risks into the FSCO’s work. Yellen said that worsening storms, wildfires, and floods were inflicting economic damage and could set off cascading losses in banking and insurance….