Fed blocks push by Basel Committee to make banks disclose climate risk

The US Federal Reserve (Fed) has blocked a push by a global banking watchdog to make climate risk a focus of financial rules, Bloomberg News reported on Wednesday, citing people familiar with the matter.

The Basel Committee on Banking Supervision had proposed that starting in January 2026, banks publish detailed information about the effect of climate change on their business to help investors and regulators check on how the risks are managed.

The European Central Bank (ECB) was also pushing for the committee to further propose that lenders disclose their strategies to meet climate commitments, but US officials cited concerns that the watchdog was overstepping its purpose, the Bloomberg report said.

There has been fierce resistance against tough proposals on climate disclosures from US companies. In March 10 Republican-led states sued the Securities and Exchange Commission, challenging new federal rules that require US-listed companies to report climate-related risks.

Critics of tougher climate proposals accuse the watchdogs of prioritising political objectives over sound financial regulation, but supporters say the disclosures are required to limit financing to the fossil fuel industry.

The committee’s members include central banks and banking regulators. It writes high-level rules for members, but any agreement reached at Basel has to be approved by regulators and legislators in each individual jurisdiction.

The ECB declined to comment on the Bloomberg report. The Fed and the Basel Committee did not immediately respond to Reuters requests for comments.

Reuters