The report makes clear that both natural disasters and the clean energy transition have implications for the industry, potentially increasing the likelihood of loan defaults.
The analysis released by the Federal Reserve is based on data from the six largest investment banks in the U.S, testing their capacity to withstand climate change impacts, including extreme hurricanes, fires, floods, and a rapid transition from fossil fuels.
The report indicates that a 'severe' hurricane in the Northeast in 2050 could affect nearly half of five banks' combined residential real estate loans in the region, emphasizing the need for preparedness in the face of future disasters and clean energy shifts.
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