Federal Reserve requests banks to adapt to climate change

(KERO) — The Federal Reserve wants the largest banks in the country to show how they plan to adapt their business operations to fight climate change.

The Federal Reserve’s exercise directs the banks to show the impact that events such as fires, floods, hurricanes, and heat waves can have on loan portfolios and real estate holdings.

A federal spokesperson says the central bank has a “responsibility regarding climate-related financial risks to ensure banks understand and manage those risks.”

The exercise is at least three years in the making. Banks have until July to submit their results. A final report is expected by the end of the year.