HFS Republicans Question Bank Regulators' Involvement in Global Climate Group

Republican leaders on the House Financial Services Committee ("HFSC") urged the GAO to investigate banking regulators' involvement with the international "Network of Central Banks and Supervisors for Greening the Financial System" ("NGFS"). The Network is an international "group of Central Banks and Supervisors, willing on a voluntary basis, to share best practices and contribute to the development of climate and risk management in the financial sector and to mobilize mainstream finance to support the transition toward a sustainable economy."

In a letter to the GAO Comptroller General, HFSC Chair Patrick McHenry and Subcommittee on Monetary Policy Chair Andy Barr raised concerns over potential foreign influence and the integration of unvetted NGFS climate models into regulatory frameworks. The legislators questioned the funding structure of the NGFS and the potential involvement of adversaries like China and Russia in financing the group's activities. They criticized the banking agencies for failing to provide Congress with sufficient details about their involvement with NGFS.

The legislators requested GAO review:

• the record-keeping and information-sharing protocols of the Federal Reserve, FDIC and OCC regarding their collaboration with NGFS and affiliated organizations;
• any confidentiality agreements between the agencies and NGFS;
• whether any confidential US supervisory information was shared with NGFS or its affiliates;
• how federal agencies determine "plausibility" in NGFS climate models used in US regulatory frameworks; and
• the extent of US resources devoted to NGFS workstreams and meetings.