A few thoughts on the House Republican arguing that the Fed shouldn’t incorporate climate into stress tests. /1

Industry sees the writing on the wall. It’s obvious that "safety and soundness" regulators should address the biggest threat to everything - the climate crisis. So U.S. financial regulators are finally starting to incorporate climate into their work. /2

The banks' attempts to ward off climate oversight are exceedingly weak. The letter’s main arguments against 30-yr climate stress tests are (1) we can't predict the weather over 30 yrs; and (2) the tests might lead banks to curtail fossil fuel finance and investment. /3

On #2: Right. That’s the point. If it’s risky, the banks should get out. No doubt that’s a huge part of why they’re increasingly backing off of fossil fuels. /4

On #1: When people characterize the climate crisis as changes in the weather, we should call it what it is: denial. It's beyond ridiculous to treat the enormous range and scale of harms from climate disruption as a new weather pattern. /5

That's a little like characterizing the threat of COVID-19 as a possibility that someone could get a virus. Not to mention that the letter completely ignores transition risk. /6

On the 30 years: I doubt anyone will win points arguing that banks shouldn't try to look that far into the future. /7

It's silly to claim that large, sophisticated businesses don't try to anticipate risks and opportunities a few decades out. Especially businesses that make - wait for it - 30-year loans. /8

A final argument in the letter amounts to a climate-denying non-sequitur: The damage from wildfires and hurricanes may be due in part to local zoning laws. /9

It’s a classic denier move to diminish the importance of climate by overstating other factors. But let's assume those factors play a large role - so what? Climate-related harms are still happening, and supervision and prudential regulation should take them into account. /10

One final note: Where are the big banks like @JPMorgan (which recently made splashy claims about climate commitments) on this? They need to oppose people claiming to speak on their behalf against good climate policy. /11

If it’s their own trade associations, they need to put a stop to it or cancel their memberships. If you’re a bank and you go along for this ride, you are emphatically not doing the right thing on climate. /end