Recently, it was decided by the government that they need to conduct more tests to get a proper and more detailed report of the situation before hand so that they can be prepared for any hazardous disaster that may be approaching in the future. It was decided that these tests will be more automated and technology-driven and so the organizations will be providing full support to make this happen accordingly. These tests need to be conducted in a channelized way so that it can provide accurate facts and figures. The government is also moving steps towards conducting a climate street test as well which will give us data of a small area. This way, government could provide aid to higher number of people.
Nowadays, The Federal Reserve and The Treasury are two organizations, becoming more focused on climate change and how can this change lead to affect the climate conditions. The changes in a financial institution affect lots of things like the business which do quality control in climate and the client who sever the financial institutes. Climate change is seen from the last few years it has some positive effect as well as some negative effect respectively. The environment change can prove to be really dangerous for an economy and people who have some serious disease. Some institutions conduct annual reports on climate that how it is changing and hence what are the effects of it on the economic cycle. More than a decade ago, many developed and developing countries organized street test of financial institutes to determine their preparation for having a low and high probability impact on financial and some the economic events. It tells us about the situations and current positions of the status of economic expenditure to improve the position of the climate. Lower dividend payment and higher capital buffers are decided by the government in the term of how it needs to be regulated and run throughout a period with the help of these study results conducted by the government and other institutes.
The idea behind conducting these tests is that it will give an overview of the climate-related event like a flood, storms, and fire, in prior in terms of danger magnitude, change in the value of the physical assets that automatically lies behind bank loans and other financial assets and liabilities. In addition climate change policies push society to adopt new ways and techniques towards new forms of energy and transportation.
