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Biden administration warns that climate change poses risks to financial system

The Biden administration on Thursday released a report warning that climate change poses an emerging threat to the stability of the U.S. financial system and urging bank regulators to take steps to mitigate that risk.

President Joe Biden mandated the report in a May 20 executive order on climate-related financial risk. Foto: Kevin Dietsch/AFP/GETTY IMAGES NORTH AMERICA

But the report by the Financial Stability Oversight Council is likely to disappoint climate activists who sought stronger measures to curtail the flow of investments into fossil fuel companies and other major emitters of the greenhouse gases that are heating the planet.

The report urges financial regulatory agencies to consider requiring companies to disclose their climate-related financial risks. While it does not mention subjecting Wall Street banks to "stress tests" like those required since the mortgage crisis, it does recommend that bank regulators use "scenario analysis" as a tool for assessing climate-related financial risks...

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