CFTC Announces New Market Risk Advisory Committee’s Climate-Related Market Risk Subcommittee

Traders Magazine Online News, July 19, 2019

John D’Antona Jr.

Commodity Futures Trading Commission (CFTC or Commission) Commissioner Rostin Behnam announced that the Commission has voted to establish the Climate-Related Market Risk Subcommittee (Subcommittee) under the CFTC’s Market Risk Advisory Committee (MRAC).  Commissioner Behnam, sponsor of the MRAC, is seeking nominations for membership on the Subcommittee through a formal request in the Federal Register.  The deadline for submissions is September 9, 2019.

“The June 2019 MRAC meeting, which examined climate change-related financial risks, laid the groundwork for this important next step.  I look forward to convening experts from industry, academia, and the public interest for what I intend to be a robust and critical effort to identify and examine the risks that climate change poses to the stability of our financial system, and determine what future actions policymakers and market participants must consider to mitigate these risks”, said Commissioner Behnam.

Commissioner Behnam established the Subcommittee to provide a report to the MRAC that will identify and examine climate change-related financial and market risks.  Topics and issues this Subcommittee may consider include, but are not limited to, the following:

• Identifying challenges or impediments to evaluating and managing climate-related financial and market risks;
• Identifying how market participants can improve integration of climate-related scenario analysis, stress testing, governance initiatives, and disclosures into financial and market risk assessments and reporting;
• Identifying policy initiatives and best practices for risk management and disclosure of financial and market risks related to climate change that support financial stability; and
• Identifying appropriate methods by which market participants’ data and analyses can enhance and contribute to the assessment of climate-related financial and market risks and their potential impacts on agricultural production, energy, food, insurance, real estate, and other financial stability indicators.

In the Federal Register Notice published last week, Commissioner Behnam invites members of the public to nominate individuals, not currently serving on the MRAC, for membership on the Subcommittee.  Self-nominations are also acceptable.  Please see the Federal Register Notice for instructions on nomination submissions.

 

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