Megabanks to take part in Fed’s pilot climate scenario analysis exercise

Bank of America BAC, -1.32%, Citigroup C, -2.33%, Goldman Sachs Group Inc. GS, -1.56%, JPMorgan Chase & Co. JPM, -1.69%, Morgan Stanley MS, -1.98% and Wells Fargo & Co. WFC, -0.76% are taking part in a pilot program on climate change with the federal government starting in 2023, the Federal Reserve Board said Thursday. The banks will team up with the Fed on a climate scenario analysis exercise. The Fed aims to “enhance the ability of supervisors and firms to measure and manage climate-related financial risks,” according to a statement. There will be no capital or supervisory implications from the pilot, the Fed said. The program was announced as Hurricane Ian lashed Florida and headed toward South Carolina. The Financial Select Sector SPDR ETF XLF, -1.26% is down 21.5% in 2022, compared to a 23.6% drop by the S&P 500 SPX, -2.11%.