McHenry, Barr Request GAO Probe on Biden-Harris Financial Regulators’ Ties to Network for Greening the Financial System
Washington,
September 16, 2024 -
House Financial Services Committee Chairman Patrick McHenry (NC-10) and Financial Institutions and Monetary Policy Subcommittee Chairman Andy Barr (KY-06) sent a letter to the Government Accountability Office (GAO) requesting the Office assist in evaluating federal banking agencies’ memberships in the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
Global governance bodies like the NGFS often operate in an opaque manner that risks the sovereignty of U.S. financial regulation to outside influence. Committee Republicans are ensuring American involvement with these organizations is transparent to protect U.S. competitiveness, as well as the safety and soundness of our financial system.
Read the full letter here.
Read a key excerpt from the letter below:
“We write to request that the Government Accountability Office (GAO) assist in evaluating federal banking agencies’ memberships in the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
“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.
“The Federal Reserve Board (FRB) formally joined the NGFS as a member in December 2020; the Office of the Comptroller of the Currency (OCC) in 2021; and the Federal Deposit Insurance Corporation (FDIC) in 2022. However, those agencies have informed the Committee on Financial Services (Committee) that there was no formal application submitted to the NGFS. This despite Article 3i of the NGFS charter requiring “submission of an official request” and requisite other information.
“Transparency in how the Banque de France-sponsored NGFS is funded is unclear. Moreover, U.S. federal banking regulators do not appear to have insight into its funding mechanisms—let alone the public. This funding structure allows the NGFS’s operations, including data compilation and model development, to be financially backed by U.S. adversaries, including China and the Russian Federation, and political activists. The funding structure also generates partisan and activist funding pass-throughs, providing their underlying funders with the ability to obtain ‘prestige advantages’ over others.
“The FRB, FDIC, and OCC have already begun inserting NGFS models and data into the U.S. regulatory framework, including reference to and use of ‘plausible’ NGFS future climate and economic scenarios, with no identification of who determines what is or is not ‘plausible.’
“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 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.’”
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