On September 12, the House Committee on Financial Services penned a letter requesting GAO assistance in evaluating the memberships of federal banking agencies in the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The letter, signed by Representatives Patrick McHenry (R-NC) and Andy Barr (R-KY), raised concerns about the transparency and funding of the NGFS. The Committee noted that although the NGFS Charter requires applicants to submit an official request for admission, the Fed, the OCC and the FDIC joined without submitting formal applications.
The Committee highlighted concerns regarding the lack of transparency in how the NGFS is funded and expressed concerns that U.S. adversaries, including China and Russia, could be financially backing the NGFS’s operations. It also questioned the extent to which U.S. federal resources were being used in collaboration with the NGFS and related foreign agents. In the letter, the Committee posed several questions to GAO regarding requested information on record-keeping protocols and the sharing of U.S. confidential supervisory information with the NGFS. The Committee also inquired about the methods used by NGFS to determine what constitutes “plausible” NGFS future climate and economic scenarios to gauge large banks’ adherence to climate-related financial risk principles. Additionally, the Committee asked about the frequency of meetings between U.S. banking officials and NGFS participants and the existence of formal applications to join the NGFS.
The Committee concluded by expressing concerns about what it described as a “severe erosion of any sense of ‘independence’ of federal banking supervision and regulation during the Biden-Harris administration,” and urged GAO to help obtain greater transparency into the interrelationships between U.S. federal banking regulators and the NGFS.
