Last year, the OCC designated one of its bank supervisors to serve as a climate risk officer to urge banks to consider climate risks in their daily operations
The federal agency overseeing the country’s largest banks has hired its first climate cop.
The Office of the Comptroller of the Currency announced Monday that Yue Chen would be the agency’s chief climate risk officer. Chen will focus on developing a new system to assess climate-driven risks to banks, and figure out how to monitor and manage them, the agency said in a statement.
Climate change, including global warming and increasingly severe and unpredictable weather events, makes it harder for banks to figure out how much money to lend to real estate and business deals, and how to price those loans. Advocates of climate-driven financial oversight say that a catastrophic weather event that caused larger-than-expected losses to banks could threaten the stability of the financial system.
The move to integrate concerns about climate change into financial regulation has been largely driven by Democratic lawmakers, who have for years been warning about the dangers climate change poses to markets. At the beginning of his term, President Joe Biden assembled an expansive team of climate experts inside the White House.
Last year, the OCC designated one of its bank supervisors to serve as a climate risk officer to urge banks to consider climate risks in their daily operations. Chen’s role is an expansion of that. She will oversee the regulator’s office of climate risk and report directly to the OCC’s leader. The agency is run by Michael Hsu, the acting comptroller.
Chen, known as Nina, has a doctorate in chemical engineering from the Massachusetts Institute of Technology. She worked at Goldman Sachs in the Wall Street giant’s asset management business and at the Royal Bank of Canada before becoming the New York director of conservation investments for the Nature Conservancy, an environmental nonprofit organization, in a job that involved marshaling private funds to help expand the group’s work.Also read: It is soon going to be dangerously hot for 100 million Americans
The OCC post is not Chen’s first role as a regulator, either; she was recently in charge of a newly created climate division at New York state’s financial regulator.
“We are fortunate to have someone with her background and experience in both finance and climate-related financial risk,” Hsu said in the statement.
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