Testifying prior to the Senate Banking Committee today, Michael Barr—President Biden’s candidate to work as Federal Reserve vice chairman for guidance—stated that the “Fed’s authorities are quite limited [and]narrow” with regard to speeding up the shift to a lower carbon economy. “I think the Federal Reserve is not able to allocate credit, [and]should not be in the business of telling financial institutions to lend to a particular sector or not to lend to a particular sector,” Barr informed Ranking Member Pat Toomey (R-Pa.).
When inquired about climate-related circumstance analysis, Barr included that “the only purpose of the Fed’s scenario analysis or other measures should be to understand risks that climate might pose to the financial system and to work with financial institutions on measures to manage those risks.”
Barr likewise used his evaluation that “capital and liquidity in the [financial]system today is quite strong,” and used assistance for “tiering” monetary guideline based the size and danger profiles of monitored organizations. He likewise informed senators that he would “commit to being evidence-driven and data driven in my approach to capital and liquidity regulation, and in regulation more broadly.”
While a number of senators raised Barr’s previous difference with particular elements of S. 2155, the bipartisan monetary regulative reform law that passed in 2018, he highlighted that “a number of concerns I had were addressed” through modifications prior to the costs’s passage, which “overall, I thought it was quite admirable the way Democrats and Republicans worked together on that legislation.”