Biden Bank rules risk an Enron-style financial crisis

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Biden Bank rules risk an Enron-style financial crisis

Joe Biden can’t fix pressing issues like the immigration crisis, supply chain failures and rising crime, but his team “is resolute and persistent when it comes to using financial regulators federal government to make their offer on climate change”.

In a Washington Times comment, Project 21 Director of Membership Development Donna Jackson and economist David W. Kreutzer of the Institute for Energy Research explain how new regulations requested by the White House could result in “Enron-quality financial statements” that could harm the American people by “making[ing] our government less responsive to the real challenges of the banking and financial markets.

In what Donna calls a “whole-of-government assault on funding industries the Biden team considers undesirable,” the rules proposed by the Federal Deposit Insurance Corporation (FDIC) and Security and Exchange Commission (SEC) (the latter about which Project 21 submitted public comment) would require financial institutions to integrate “climate-related financial risk management” into their reporting and operations, write Donna and David.

This makes no sense to Donna, a former accountant and auditor:

Whether bankers at any level or location need to create and adhere to climate policies is a different question than whether there might be man-made climate effects. The exposure of physical assets to weather damage is real and significant, but that does not necessarily make it climate damage or a systemic financial threat.

Should bankers be concerned about the potential risk posed by possible climate change? A recent staff report from the Federal Reserve Bank of New York posed the question this way: “How bad are weather disasters for banks? Their response: “Not really.

With historically inconsistent weather patterns and unreliable modeling of future weather patterns, Donna and David note that “[n]one of them poses a direct threat to financial decisions.

This is where the Biden administration enters Enron territory – potentially creating a situation similar to the shares of the energy trading company that spectacularly died out in the early 2000s to cause great suffering. to investors and consumers:

It should be noted that Enron and its accountants got into trouble for financial statements that were out of step with reality. In pursuit of its extreme climate agenda, the Biden administration now wants to impose essentially the same behavior by requiring a potential overstatement of climate change risks for businesses.

In fact, generally accepted accounting principles have strict requirements to address material risks versus non-material risks, as well as known risks versus speculative risks.

“Over time, there could be a worsening of extreme weather patterns which could impose more severe costs on banking risk. Or maybe not,” Donna remarked. “Does the speculative possibility of additional risk compel bankers or regulators to address those risks now?”

Yet whatever appears to be on the liberal agenda on Pennsylvania Avenue is ‘more confusion than clarity for investors, bankers and citizens’

And there seems to be an ignorance on the part of the White House regarding what has happened in global resource development that is both startling and hopeful:

Over the past 50 years, the world’s population has doubled and resource extraction has accelerated. Yet the planet is no closer to resource depletion than we thought at the time. More importantly, virtually every measure of human well-being has improved.

To read the full commentary – “Don’t Bank on Catastrophic Climate Change” by Donna Jackson and David W. Kreutzer – click here to go to the Washington Times website.

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