Fed’s Top Climate Official Kevin Stiroh Leaves US Central Bank

Jerome Powell during a House Financial Services Committee hearing in Washington, DC, on June 24. Photographer: Al Drago/Bloomberg Photo by Al Drago /Bloomberg

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(Bloomberg) — Kevin Stiroh, the Federal Reserve’s most senior official focused on the financial risks associated with climate change, has left the US central bank.

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Stiroh, who back in 2021 moved to the Fed’s Board of Governors to take on a newly-created leadership role on climate, no longer works for the Fed, according to people familiar with the matter who asked not to be identified discussing confidential matters. He had previously worked for the Federal Reserve Bank of New York.

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A spokesperson for the Federal Reserve declined to comment. Stiroh didn’t respond to a message seeking comment.

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The departure follows efforts by the Fed to downplay the relevance of climate change in safeguarding financial stability. Those efforts have encompassed interventions to water down global standards, including those set by the Basel Committee on Banking Supervision, Bloomberg has previously reported.

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It’s a development that’s left US financial regulators and central bankers at odds with their counterparts in Europe and Canada. Tensions erupted during a Financial Stability Board meeting in early June. Back then, officials required a timeout to regain their composure after the US representative said regulators should only worry about climate change if there’s proof of an imminent financial stability risk.

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Stiroh’s role required him to lead the Fed’s supervisory work on the financial risks of climate change and to chair the Supervision Climate Committee, which was supposed to increase the central bank’s understanding of the potential implications of climate change for financial institutions and markets. The SCC was closed earlier this year, along with other internal climate groups focused on financial stability and economic impacts.

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Stiroh also represented the Fed on climate topics at the Basel Committee, where he co-chaired the Task Force on Climate-related Financial Risks alongside Frank Elderson of the European Central Bank. That role became more difficult over the past 18 months, as the Fed sought to limit the scope of the TFCR’s work, forcing through several major concessions along the way.  

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Climate change has long been a thorny issue for Fed Chair Jerome Powell. While he has in the past acknowledged the threat that climate change poses to the US economy and financial system, he also has repeatedly stressed that the central bank doesn’t have a mandate to help steer the low-carbon transition.

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In testimony before the House Financial Services Committee on June 24, Powell said “it is a big risk to our independence if we were to stray into areas where we shouldn’t, that really aren’t part of our mandate.” He identified climate as “the biggest risk” in that scenario. He also said the Fed has done “the bare minimum” and “much less than I think people understand” on the climate topic.

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At the Fed, Stiroh also served as senior adviser to Michael Gibson, director of the supervision and regulation division. Gibson is set to leave the US central bank following more than three decades there.

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Stiroh’s time at the New York Fed, which he joined in 1999, included positions spanning head of the supervision group, as well as helping develop stress tests for Wall Street banks following the 2008 financial crisis. 

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