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Investing.com -- The Federal Reserve, FDIC, and OCC announced Thursday they are withdrawing the interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions.
The principles, originally issued in October 2023 for financial institutions with over $100 billion in total consolidated assets, are being rescinded effective immediately, according to a notice that will be published in the Federal Register.
Regulators stated they "do not believe principles for managing climate-related financial risk are necessary" because existing safety and soundness standards already require all supervised institutions to maintain effective risk management appropriate to their size, complexity, and activities.
The agencies noted that financial institutions "are expected to consider and appropriately address all material financial risks and should be resilient to a range of risks, including emerging risks."
The OCC had previously withdrawn its participation in the principles earlier in 2025.
According to a Federal Reserve Board staff memo dated October 2, the climate principles "may be distracting large financial institutions from the management of material financial risks." Staff concluded that "existing risk management frameworks described in the Agencies’ other rules and guidance are sufficient to help ensure financial institutions are managing all material risks."
The now-rescinded principles had outlined guidance for climate-related financial risk management across six areas: governance; policies, procedures, and limits; strategic planning; risk management; data measurement and reporting; and scenario analysis.
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