On 5/10/2022, Committee ranking member Patrick Toomey (R-Pa.) and other Republicans have suggested the financial system would be better served if agencies focused on threats like cybersecurity, Toomey started with, “So, do you subscribe to what I think is the administration’s general paradigm for this, that the risk to the financial system comes in two categories; one, physical risk associated with severe weather events, and the other, transition risk that’s associated with an evolution away from fossil fuels? Do you subscribe to that paradigm, or do you think there’s another category of risks?”
YELLEN: “I would agree with you that those are the main risks.”
TOOMEY: “Okay. So, can you name a single financial institution in America that has failed as a result of the severe weather event in the last 50 years?”
YELLEN: “I’m not aware of — ”
TOOMEY: “I don’t think there has been one, and every single year, we have blizzards. We have hurricanes. We have wildfires, and sometimes they’re horrendous. And some of them have been recent, but we’ve never had a single financial institution fail, much less the entire financial system,” Toomey said. “So I think it’s pretty clear. … There’s really no physical risk that’s even remotely imminent.”
Yellen told lawmakers that while the United States may need to rely on fossil fuels in the short term, a move toward renewables would provide the U.S. economy with more stability, “I feel what the real moral of the situation we face is that as long as we are as dependent as we are on fossil fuels in our energy supply, that we will always face vulnerabilities from the decisions of Russia or other countries. We face geopolitical risk, and what we need to do is transition to renewables, and we need to deal with climate change,” Yellen said.
US Senator Patrick Toomey of Pennsylvania, the committee’s leading Republican, said the Biden administration’s priorities are misplaced when it comes to the financial sector. He said cybersecurity, rather than climate-related risks from severe weather, poses a “real time, continuous risk” to every single financial institution in America because of the constant bombardment of attacks. “We have blizzards, we have hurricanes, we have wildfires and sometimes they’re horrendous. And some of them have been recent, but we’ve never had a single financial institution fail, much less the entire financial system,” Toomey said.
“Both cybersecurity and climate change pose risks”, Yellen said, acknowledging that the former does pose “an imminent risk.” But, Yellen added, “I think climate change is an existential threat to our globe and to our future” and it is getting noticeably more severe.
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Toomey to Yellen: No financial institution failed due to severe weather. Cybersecurity, rather than climate poses real risk every financial institution.