A recent report by a subcommittee of the U.S. Commodity Futures Trading Commission (USCFTC) highlights the financial sector’s vulnerability to the impacts of climate change. In addition to the direct impacts relating to assets, regulatory uncertainty due to the lack of a national plan to address climate change makes preparing for disruptions an even bigger challenge. The big national banks will likely be able to adjust to sudden extreme weather events, at least in the near- and medium-term, but one part of the financial system is already reeling: community and agricultural banks. Impacts to community and agricultural banks
Community and agricultural banks typically serve smaller and more rural communities. They are invested in and of the communities they serve. They do not hold the same level of assets as major national financial institutions and are therefore more vulnerable to major shocks. Every state has community banks, but the top five standouts from a climate perspective are Texas, Illinois, Minnesota, Iowa, Missouri and Kansas. All of these states have suffered significant climate impacts in the past few years. Similarly, agricultural banks, which focus on farmers , are primarily located in and lend to farmers in Midwestern states.
Recent floods are only […]
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