Two U.S. lawmakers want the Government Accountability Office (GAO) to help them evaluate the memberships of federal banking agencies in a global governance body, the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
The NGFS is a group of central banks and supervisors who volunteer to “contribute to the development of environment and climate risk management in the financial sector and to mobilize mainstream finance to support the transition toward a sustainable economy,” per the organization’s website.
House Financial Services Committee Chairman Patrick McHenry of North Carolina and Financial Institutions and Monetary Policy Subcommittee Chairman Andy Barr of Kentucky said in a letter to the GAO that bodies like the NGFS “often operate in an opaque manner” and that committee Republicans want to ensure American involvement with these groups is transparent, according to a Monday (Sept. 16) press release issued by the committee.
Specifically, the letter focuses on the membership of the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp. (FDIC) in the NGFS.
The lawmakers said in their letter that it is unclear how the NGFS is funded.
“This funding structure allows the NGFS’s operations, including data compilation and model development, to be financially backed by U.S. adversaries, including China and the Russian Federation, and political activists,” McHenry and Barr wrote. “The funding structure also generates partisan and activist funding pass-throughs, providing their underlying funders with the ability to obtain ‘prestige advantages’ over others.”
Reached by PYMNTS, the Federal Reserve and the FDIC declined to comment on the letter.
An OCC spokesperson told PYMNTS that the OCC does not comment on congressional correspondence.
The NGFS did not immediately reply to PYMNTS’ request for comment.
McHenry and Barr wrote in their letter to the GAO that the Federal Reserve, the OCC and the FDIC joined the NGFS in 2020, 2021 and 2022, respectively, and that the three federal banking agencies insert NGFS models and data into the U.S. regulatory framework.
The lawmakers added that the agencies have been “only minimally responsive” to the committee’s requests for details about their involvement with the NGFS.
“We respectfully request that the GAO assist the committee in gaining greater transparency into the opaque interrelationships between the Federal Reserve, FDIC, OCC and the global governance body called the NGFS,” they wrote in the letter.
When the Federal Reserve joined the NGFS in 2020, it said in a press release that it had been participating in NGFS discussions and activities for more than a year.
“As we develop our understanding of how best to assess the impact of climate change on the financial system, we look forward to continuing and deepening our discussions with our NGFS colleagues from around the world,” Federal Reserve Board Chair Jerome H. Powell said in the Dec. 15, 2020, press release.
The OCC said in a July 27, 2021, press release that it joined the NGFS to “collaborate with central banks and peer supervisors to share best practices and contribute to the development of climate risk management in the financial sector.”
Martin J. Gruenberg, who was the FDIC’s acting chairman at the time, said in an October 3, 2022, speech that the agency joined the NGFS “to foster collaboration and share best practices in addressing climate-related financial risks on a global basis.”
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