A Convenient Myth: Climate Risk and the Financial System

Treasury Secretary Janet Yellen attends the House Financial Services Committee hearing in Washington, D.C., September 30, 2021. (Al Drago/Pool via Reuters)
Politicians are using financial regulations to circumvent the legislative process.

NRPLUS MEMBER ARTICLE I n an October 21 press release, Janet Yellen — Treasury secretary and head of the Financial Stability Oversight Council (FSOC), the umbrella group that unites all U.S. financial regulators — eloquently summarized a vast program to implement climate policy via financial regulation:

FSOC is recognizing that climate change is an emerging and increasing threat to U.S. financial stability. This report puts climate change squarely at the forefront of the agenda of its member agencies and is a critical first step forward in addressing the threat of climate change.

You do not have to disagree with one iota of climate science — and

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John H. Cochrane is the Rose-Marie and Jack Anderson senior fellow at the Hoover Institution at Stanford University. He is also an adjunct scholar of the Cato Institute, among many affiliations. He authors the “grumpy economist” blog. All opinions are his own, and not necessarily those of the Hoover Institution or Stanford University.


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