US Federal Reserve announces withdrawal from environmental financial network

(MENAFN) On Friday, the US Federal Reserve officially announced its decision to withdraw from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

In its statement, the Federal Reserve explained that while it has valued its engagement with the NGFS and the insights shared by its members, the network’s scope has expanded over time. The bank noted that the NGFS now covers a wider array of issues, many of which fall outside the Federal Reserve's statutory mandate and responsibilities.

The NGFS was initially launched in 2017 during the Paris One Planet Summit as a voluntary network aimed at promoting the sharing of best practices among central banks and financial supervisors. Its goal is to contribute to the development of environmental and climate risk management frameworks within the financial sector and to mobilize mainstream finance in support of the transition to a more sustainable global economy.

The Federal Reserve joined the NGFS in 2020, when the network had already grown to include over 160 members and observers, comprising central banks and financial authorities from across the globe. While the US central bank will no longer be part of this network, the decision underscores the challenges of balancing environmental initiatives with the institution’s core mission and regulatory framework.

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