Story perspectives

Fed and FDIC Withdraw Climate Risk Guidance, Spark Controversy

10/17/2025

Summary

Story summary

On October 16, 2025, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) withdrew guidance on climate-related financial risk for large institutions.
They said existing safety and soundness standards require banks to manage all material risks.
The Office of the Comptroller of the Currency previously withdrew from these principles.
Federal Reserve Governor Michael Barr opposed the move, saying it raises risks.

History

Historical Context

The 2015 Paris Agreement aimed to unite global efforts against climate change, establishing commitments for greenhouse gas reductions. However, the U.S. withdrew in 2020 under President Trump, citing economic concerns. In 2021, President Biden rejoined, emphasizing climate action. The recent withdrawal of climate risk guidance by the Federal Reserve and FDIC signals a shift in regulatory focus, potentially increasing financial instability linked to climate risks.

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Story summary

On October 16, 2025, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) withdrew guidance on climate-related financial risk for large institutions.
They said existing safety and soundness standards require banks to manage all material risks.
The Office of the Comptroller of the Currency previously withdrew from these principles.
Federal Reserve Governor Michael Barr opposed the move, saying it raises risks.

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