Ominous News from the San Francisco Fed
By David Henderson
And you thought the Fed was just about monetary policy.
The Federal Reserve Bank of San Francisco wants banks to get extra credit for making loans that help communities adapt to climate change and prepare for future natural disasters.
A paper released on Monday by researchers at the San Francisco Fed argues that banks should receive credit for climate-adaptation investments under the Community Reinvestment Act, which requires banks to lend to low- and moderate-income communities.
The report represents the latest in a series of small steps by Federal Reserve banks to recognize climate change as a threat to the U.S. financial system.
These are the opening three paragraphs of a news item in today’s Wall Street Journal. It’s Laura Kusisto, “San Francisco Fed Wants to Reward Banks for Combating Climate Change,” Wall Street Journal, June 18, 2019.
The Fed is already the central planner of the U.S. money supply. It now seems to be toying with the idea of becoming a central planner in other areas.