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Can Global Financial Markets Manage Climate Risk?

October 12, 2021

Global financial markets are constantly factoring in risks, such as cyber threats and the current pandemic. But is there something special about climate change that market participants are only starting to understand?

This episode of LaSalle Street explores the challenge of climate change risk, including whether this emerging risk is being properly priced into financial markets and if risk-management strategies need to change to account for the complexity and projected duration of climate change. The discussion delves into key issues such as whether there should be a price on carbon and if corporate disclosures can play an essential role in managing climate risk.

Robert Engle and Dick Berner, co-directors of the Volatility and Risk Institute at New York University (NYU) Stern School of Business, join host Alessandro Cocco, vice president of the Financial Markets Group at the Chicago Fed. Engle is a professor emeritus of finance at NYU Stern and the recipient of the 2003 Nobel Prize in Economics. Berner is a clinical professor of management practice in the Department of Finance at NYU Stern. He served as the first director of the Office of Financial Research and chief or senior economist at Morgan Stanley, Mellon Bank, and the Board of Governors of the Federal Reserve System.

View transcript

On Mic

Alessandro Cocco

Alessandro Cocco

Vice President
Federal Reserve Bank of Chicago


Richard Berner

Richard Berner

Clinical Professor of Management Practice
New York University Stern School of Business


Robert Engle

Robert Engle

Professor Emeritus of Finance
New York University Stern School of Business


The views expressed on LaSalle Street are the speakers’ own and do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System. Any links to external resources or websites are provided for informational purposes only.


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