Yellen Says Climate Change Will Shock Financial System in Coming Years
People on the coast during Hurricane Nicole in the US
InternationalIndiaAfricaWASHINGTON (Sputnik) – Climate change may turn into a source of shocks to the financial system in the years to come, US Treasury Secretary Janet Yellen said on Tuesday.”Climate change will likely become a source of shocks to the financial system in the coming years,” Yellen said at the first meeting of the climate-related Financial Risk Advisory Committee.She noted that natural disasters and warming temperatures can lead to declines in asset values that could cascade through the financial system. Delayed and disorderly transition to a net-zero economy could lead to shocks to the financial system as well, she added.Yellen warned that the risks are not hypothetical and are already having a negative impact on the US economy.”In the US, there’s been at least a five-fold increase in the annual number of billion-dollar disasters over the past five years compared to the 1980s, even after adjusting for inflation. States like California, Florida, and Louisiana recently have seen especially severe storms and wildfires,” she noted.The secretary emphasized that the disasters are taking a “terrible toll” on the economy. Some insurers are raising rates or even leaving high-risk areas.
Events That Shaped Year 2022Seven Most Chilling Natural Disasters of 202226 December 2022, 10:15 GMTYellen warned that such developments could spill over to other parts of the interconnected financial system. Yellen stressed the need to take climate change into account. She expressed the hope that the government will be able to increase the resilience of the US financial system to climate change effects.
