The leader of the House Financial Services Committee is urging the Government Accountability Office (GAO) to evaluate federal banking agencies’ memberships in a certain group that promotes the “greening” of the financial system.
The organization in question is called the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). U.S. Rep. Patrick McHenry (R-NC), chair of the committee, said global governance bodies like the NGFS could put U.S. financial regulations at risk to outside influence.
McHenry and committee Republicans want to ensure that American involvement with these organizations is transparent to protect U.S. competitiveness.
“The NGFS originated from the ‘Paris One Planet Summit’ in December 2017 with a purpose of ‘strengthening the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments’ (i.e., channel credit toward ‘green’ activities and away from others). The Secretariat of the NGFS is provided by the Banque de France, with no budgetary information provided to the public,” committee Republicans wrote in a letter to the GAO.
The Federal Reserve Board joined the NGFS in December 2020; the Office of the Comptroller of the Currency (OCC) in 2021; and the Federal Deposit Insurance Corporation (FDIC) in 2022. However, they do not appear to have insight into its funding mechanisms. That leaves open to question if the backers are U.S. adversaries, including China and the Russian Federation, or political activists.
“Given lack of transparency from U.S. federal bank regulatory agencies, Congress is forced to guess the extent to which officials and researchers from those agencies are actively devoting U.S. federal resources to joint work with the NGFS and related foreign agents, including combing through publications and workstream products on the NGFS’s opaque website,” the letter stated. “The Federal Reserve, including district Federal Reserve bank officials and researchers, OCC, and FDIC have been only minimally responsive to requests from the Committee for details of those agencies’ involvement in the NGFS and fulfillment of their commitments as NGFS members, including the commitment to ‘[r]aising awareness to the work of the NGFS in their jurisdiction.’”