Major banks in the United States and globally have begun to assert an active role in the transition to a low-carbon economy and the reduction of climate risk through private environmental and climate governance. This Essay situates these actions within historical and economic contexts: It explains how the legal foundations of banks’ sense of social purpose intersect with their economic incentives to finance major structural tran­sitions in society. In doing so, this Essay sheds light on the reasons why we can expect banks to be at the center of this contemporary transition. This Essay then considers how banks have taken up this role to date. It proposes a novel taxonomy of the various forms of private environmental and climate governance emerging in the U.S. banking sector today. Fi­nally, this Essay offers a set of factors against which to normatively assess the value of these actions. While many scholars have focused on the role of shareholders and equity in private environmental and climate govern­ance, this Essay is the first to position these steps taken by banks within that larger context.

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Major banks, both in the United States and globally, have begun to assert an active role in the transition to a low-carbon economy and the reduction of climate risk. All six major U.S. banks have committed publicly to achieve global net-zero emissions by 2050 and to align with the goal of the Paris Agreement on Climate Change to limit global warming to well below 2ºC. 1 Eamon Barrett, Wells Fargo Is the Last of the Big Six Banks to Issue a Net-Zero Climate Pledge. Now Comes the Hard Part, Fortune (Mar. 9, 2021), https://‌‌​‌2021/03/09/wells-fargo-climate-carbon-neutral-net-zero/ []. Other large, internationally active banks have made this commitment as well. Big Banks Join Net-Zero Emissions Alliance, Finextra (Apr. 21, 2021),​37903/big-banks-join-net-zero-emissions-alliance [https://‌]; see also Paris Agreement to the United Nations Framework Convention on Climate Change, art. 4, Dec. 12, 2015, T.I.A.S. No. 16-1104 (entered into force Nov. 4, 2016, reentered Feb. 19, 2021) [hereinafter Paris Agreement]. Article 2(1)(a) of the Paris Agreement commits to a goal of limiting the global increase in temperature to “well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” Id. art. 2(1)(a). Article 2(1)(c) of the Agreement specifically links this goal to sustainable finance through the mechanism of “[m]aking finance flows consistent with a pathway to­wards low greenhouse gas emissions and climate-resilient development.” Id. art. 2(1)(c); see also infra section III.A. Particularly significant among these commit­ments are the dec­larations, such as that of J.P. Morgan Chase & Co. (JP Morgan Chase), that these banks will not only reduce their own opera­tional emissions but also that they will achieve net-zero emissions with respect to their lending portfolios. 2 See David Benoit, JPMorgan Pledges to Push Clients to Align With Paris Climate Agreement, Wall St. J. (Oct. 6, 2020), (on file with the Columbia Law Review); Press Release, JPMorgan Chase & Co., JPMorgan Chase Expands Commitment to Low-Carbon Economy and Clean Energy Transition to Advance Sustainable Development Goals (Feb. 25, 2020),‌jpmorgan-chase-expands-commitment-to-low-carbon-economy-and-clean-energy/ [​NU3T-​MPV4] [hereinafter JP Morgan Chase Expands Commitment]. Likewise, Citibank has adopted the “2025 Sustainable Progress Strategy,” committing $250 billion to finance and promote a smooth tran­sition to a low-carbon economy through invest­ments in renewable energy, clean technology, and sustainable agriculture and transportation, among other industries. 3 2025 Sustainable Progress Strategy: Low Carbon Transition, Citigroup, Inc., [] (last visited July 22, 2021). Other major U.S. banks, including Bank of America, Goldman Sachs, and Wells Fargo have made similar commitments not only to reduce emissions from their operations but also to finance “green” tech­nologies and industries that will promote a smooth transition to a low-car­bon economy and to reduce climate risk in their lending portfolios. 4 See Our Commitment to Environmental Sustainability, Bank of Am., https://‌‌about.‌ [https://‌](last visited July 22, 2021) (stating that Bank of America intends to achieve “net zero greenhouse gas” emissions by 2050 through its “global business strategy” and work with its partners); Goldman Sachs, Goldman Sachs Environmental Policy Framework, [] [hereinafter Goldman Sachs, Environmental Policy Framework] (last visited July 23, 2021) (“[W]e believe that capital markets can and should play an important role in addressing environmental challenges including climate change. To that end, we are committed to catalyzing innovative financial solutions and mar­ket opportunities to help address climate change.”); Advancing Environmental Sustainability, Wells Fargo,​environment [] (last visited July 22, 2021) (stating that Wells Fargo is committed to transitioning to a “low-carbon economy” and reducing “the impacts of climate change” on their business, communities, and customers). Various public and pri­vate entities have identified criteria against which to measure whether an investment is en­vironmentally sustainable or “green.” See Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the Establishment of a Framework to Facilitate Sustainable Investment, and Amending Regulation (EU) 2019/2088, 2020 O.J. (L 198) 13, 14–15. Such a taxonomy is needed to promote a shared understanding among investors across borders and to reduce concerns about greenwashing. Id. at 14 (“[G]reen­washing refers to the practice of gaining an unfair competitive advantage by marketing a financial product as environmentally friendly, when in fact basic environmental standards have not been met.”). For example, under Regulation (EU) 2020/852, an economic activity is considered sustainable if it contributes to at least one of six objectives: “climate change mitigation; climate change adaptation; the sustainable use and protection of water and ma­rine resources; the transition to a circular economy; pollution prevention and control; and the protection and restoration of biodiversity and ecosystems.” Id. at 17; id. at 22 (noting that an economic activity should qualify where it “directly enables other activities to make a substantial contribution” to at least one of the six objectives); id. at 23 (noting that contri­bution to at least one of the objectives is required).

These building blocks of bank strategy that orient capital flows toward more sustainable investments and push debtors to be more environmen­tally responsible represent significant new forms of private environmental governance. 5 See Sarah E. Light & Eric. W. Orts, Parallels in Public and Private Environmental Governance, 5 Mich. J. Env’t & Admin. L. 1, 3 (2015) [hereinafter Light & Orts, Parallels] (defining private environmental governance as “the traditionally ‘governmental’ functions of environmental standard setting and enforcement that private actors, including business firms and nongovernmental organizations (NGOs), adopt to address environmental con­cerns” and observing that private actors adopt similar tools as public regulators); Michael P. Vandenbergh, Private Environmental Governance, 99 Cornell L. Rev. 129, 133 (2013) [here­inafter Vandenbergh, Private Environmental Governance] (defining private environmental governance as “play[ing] the standard-setting, implementation, monitoring, enforcement, and adjudication roles traditionally played by public regulatory regimes”); cf. Cary Coglianese & David Lazer, Management-Based Regulation: Prescribing Private Management to Achieve Public Goals, 37 Law & Soc’y Rev. 691, 696–700 (2003) (discussing private firms’ actions to achieve public-minded goals). There is also a substantial amount of corporate governance literature on which this Essay builds regarding the disciplining effect on bor­rowers that bank debt can have. See generally Douglas G. Baird & Robert K. Rasmussen, Private Debt and the Missing Lever of Corporate Governance, 154 U. Pa. L. Rev. 1209 (2006) (developing a discussion around the role of creditors in firm governance); George G. Triantis & Ronald J. Daniels, The Role of Debt in Interactive Corporate Governance, 83 Calif. L. Rev. 1073, 1982–90 (1995) (examining the role of lenders in correcting “manage­rial slack”); Yesha Yadav, The Case for a Market in Debt Governance, 67 Vand. L. Rev. 771, 783 (2014) (proposing a market for trading lender control rights over debtor corporate governance). Moreover, this work builds on the insights of legal scholars who have argued that banks can serve an essential function as market gatekeepers. Cf. John C. Coffee, Jr., Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms, 84 B.U. L. Rev. 301, 302 (2004) (discussing the gatekeeping function served by, among others, finan­cial analysts at investment banks). It also generally engages the body of scholarly literature discussing corporate purpose, insofar as much of the debate would call for greater attention to climate and sustainability issues. E.g., Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit 38–57 (2020) (arguing that companies can promote broad social and environmental goals and still realize profits); Oliver Hart & Luigi Zingales, Companies Should Maximize Shareholder Welfare Not Market Value, 2 J.L. Fin. & Acct. 247, 270 (2017) (arguing that corporations can act to promote shareholder interests beyond profit maximization, including interests in the environment). In other words, rather than government regulators dictating compliance with environmental standards to address climate risks and pro­mote sustainable economic activities, banks themselves are acting as change agents with respect to their lending portfolios in the first instance and also, in some cases, in regard to their securities underwriting and asset management businesses. 6 This Essay’s goal is not to evaluate the overall balance of banks’ portfolios but ra­ther to focus on key aspects of the role that banks and the credit they provide are beginning to play in the transition to a low-carbon economy, highlighting the ways in which banks can play a unique role as compared to other forms of private governance.

The banks’ actions are consistent with appeals from major nongov­ernmental organizations (NGOs) representing investors. For example, Ceres, a leading investor-oriented NGO, has called for banks to align with the goals of the Paris Agreement by engaging in more robust climate risk assessment and disclosure and setting targets to achieve net-zero emissions within each affected sector of their lending portfolios. 7 Financing a Net-Zero Economy: Measuring and Addressing Climate Risk for Banks, Ceres (Oct. 19, 2020),​measuring-and-addressing-climate-risk-banks []. The banks’ actions are likewise facilitated by the actions of NGOs of which they are members, including the Partnership for Carbon Accounting Financials (PCAF). In 2020, PCAF launched the Global GHG Accounting and Reporting Standard for the Financial Industry, the first standard for financial institu­tions to measure and report greenhouse gas (GHG) emissions in their lending and investment portfolios. 8 The Partnership for Carbon Accounting Financials (PCAF) Launches First Global Standard to Measure and Report Financed Emissions, P’ship for Carbon Acct. Fins. (Nov. 18, 2020), []. The standard allows for the meas­urement of “financed emissions of six asset classes: listed equity and corporate bonds, busi­ness loans and unlisted equity, project finance, commercial real estate, mortgages and motor vehicle loans.” Id. Including Bank of America and Morgan Stanley from the United States, sixteen financial institutions globally participated in creating the PCAF standard and after receiving “public consultation” and feedback from “financial institutions, sustainable fi­nance stakeholder groups, policy makers, data providers, consultants, and civil society organizations.” Id.

These actions by banks resemble the actions of firms in other industries that have sought to reduce emissions and promote envi­ronmentally positive actions throughout their value chain. 9 The notion of private environmental governance is distinct from the concept of “second-order agreements” such as corporate acquisition, credit agreements, and “good neighbor” agreements between private firms that allocate public regulatory burdens within the private sphere. Michael P. Vandenbergh, The Private Life of Public Law, 105 Colum. L. Rev. 2029, 2031 (2005) (identifying these “second-order agreements” as an important but underappreciated role played by private actors in public regulatory enforcement); cf. Rory Van Loo, The New Gatekeepers: Private Firms as Public Enforcers, 106 Va. L. Rev. 467, 496, 499–502 (2020) (observing and assessing the increasing role of firms as enforcers of public law and regulation). In the non-fi­nancial corporate space, Walmart has used its market power to insist that its suppliers report on and reduce their GHG emissions. 10 Walmart and other firms have used supply-chain contracts to insist upon other en­vironmental governance provisions within their value chain, just as governments use their powers of procurement to prefer environmentally friendlier goods and services. See Michael P. Vandenbergh, The New Wal-Mart Effect: The Role of Private Contracting in Global Governance, 54 UCLA L. Rev. 913, 943 (2007) (examining supply chain contracts as a form of private environmental governance); see also Sarah E. Light & Eric W. Orts, Public and Private Procurement in Environmental Governance, in Policy Instruments in Environmental Law (Kenneth Richards & Josephine van Zeben eds., Edward Elgar Publishing 2020) (dis­cussing public procurement in the United States and EU as a parallel to private supply chain management). Through Project Gigaton, Walmart aims to avoid one billion metric tons (one gigaton) of carbon dioxide emissions in its supply chain by 2030. 11 Project Gigaton, Walmart Sustainability Hub, https://​‌‌‌‌‌‌‌‌‌‌‌‌‌‌www.walmartsustainabilityhub.​com/‌​project-gigaton [] (last visited July 22, 2021). In its first two years, Project Gigaton reported ninety-three million metric tons of carbon dioxide emissions avoided in connection with the program. Press Release, Walmart, Walmart Launches New Reusable Bag Campaign; Announces 93 Million Metric Tons of Supplier Emission Reductions Through Project Gigaton and Announces New Sustainable Textile Goals (Apr. 10, 2019),​newsroom/​2019/04/10/walmart-launches-new-reusable-bag-campaign-announces-93-million-metric-tons-of-supplier-emission-reductions-through-project-gigaton-and-announces-new-sustainable-textile-goals []. Technology firms have also made public commitments. Google reports that it has been carbon neutral since 2007, and aims to be carbon-free in its operations by 2030. 12 Google, Realizing a Carbon-Free Future: Google’s Third Decade of Climate Action 2 (2020), [https://​]. Other major firms in diverse industries have likewise required their sup­pliers to disclose and reduce GHG emissions through the CDP (formerly Carbon Disclosure Project) Supply Chain initiative. 13 Supply Chain, CDP, [​X625-E252] (last visited Aug. 1, 2021) (noting that CDP’s supply chain consists of over 200 members, $5.5 trillion in purchasing power, and requests for disclosure from more than 15,000 suppliers). In addition, there has been a great deal of scholarly focus on the role of shareholders in ad­vancing the transition to a low-carbon economy and in reducing climate risk. Legal scholars have argued that shareholders have an especially im­portant role to play in reducing climate risk and shaping firm behavior, particularly, “universal owners” like Vanguard, State Street, and BlackRock, which collectively hold almost a third of all public equity. 14 See, e.g., Madison Condon, Externalities and the Common Owner, 95 Wash. L. Rev. 1, 4–5 (2020) (observing that common owners control significant shares of major firms and have pressured firms to address emissions and climate change); John C. Coffee, Jr., The Future of Disclosure: ESG, Common Ownership, and Systematic Risk 8, 24–25 (Eur. Corp. Governance Inst., Law Working Paper No. 541/2020, 2021),​abstract=​3678197 [] [hereinafter Coffee, Future of Disclosure] (ar­guing that the SEC should recognize that common owners have different disclosure needs than retail investors and should update disclosure guidance accordingly).

Thus, the notion that a firm would seek to reduce greenhouse gas emissions within its value chain as a form of private environmental govern­ance is not new. 15 Standard reporting metrics divide GHG emissions into three “Scopes”: Scope 1 emissions are direct, on-site emissions from sources an entity owns or controls; Scope 2 emis­sions are indirect emissions from purchased heat and electricity; and Scope 3 emissions are all other indirect emissions within the value chain, including employee business travel. FAQ, Greenhouse Gas Protocol,​sites/default/files/​ghgp/​public/​FAQ.pdf [] (last visited July 22, 2021) (providing definitions for the three “Scopes”). Thus, emissions within a bank’s value chain—including its lending portfolio—constitute Scope 3 emissions. However, unlike other major corporations—even those as dominant in their industry as Walmart or Vanguard—banking institu­tions, as sources of private environmental and climate governance, have several unique features that warrant special focus. First, banks hold a spe­cial place in society as financial intermediaries. 16 There is also a substantial literature in finance recognizing the role of banks as “monitors” of corporate governance, which includes borrower behavior, and how such mon­itoring produces information externalities that benefit other stakeholders. See, e.g., Douglas W. Diamond, Financial Intermediation and Delegated Monitoring, 51 Rev. Econ. Stud. 393, 393, 395 (1984) (finding that financial intermediaries like banks have net cost advantages in delegated monitoring of loan contracts over other potential monitors); Carlo M. Gallimberti, Richard A. Lambert & Jason J. Xiao, Bank Relations and Borrower Corporate Governance and Incentive Structures 5 (Aug. 30, 2017), https://​​abstract=3029930 [] (unpublished manuscript) (observing different mechanisms to reduce monitoring costs depending upon the relationship between borrower and lender). Generally, these articles tend to focus on borrower mismanagement or misbehavior. There is also literature in this space that examines the economic function of banks with regard to their monitoring and information production roles. E.g., Diamond, supra, at 393–95; Hayne E. Leland & David H. Pyle, Informational Asymmetries, Financial Structure, and Financial Intermediation, 32 J. Fin. 371, 383–84 (1977); Joseph E. Stiglitz & Andrew Weiss, Credit Rationing in Markets With Imperfect Information, 71 Am. Econ. Rev. 393, 393 (1981). This Essay builds on these insights in the finance literature by adding fur­ther specific context of borrowers’ environmental footprints and the role that debt can play in monitoring and encouraging climate-positive borrower behavior. Second, banks play their cap­ital-allocation role in reaction to a particular set of economic incen­tives—to mitigate financial risk and to accelerate high-potential projects—which motivate them to facilitate the kinds of structural change required for tran­sition to a low-carbon economy. Third, banks, as one type of private creditor, also possess significant contractual power over the operations and cashflow—and thus behavior—of their borrowers. 17 As Professors Douglas Baird and Robert Rasmussen have pointed out, institutions that issue private debt, like banks, exercise powerful “levers” over the governance of a com­pany via the covenants imposed in a loan. See Baird & Rasmussen, supra note 5, at 1227–29. Regardless of what po­sition one may take on the authority of U.S. financial regulators to address climate change through public law—a subject on which there remains dis­agreement 18 Compare 21st Century Economy: Protecting the Financial System From Risks Associated With Climate Change: Hearing Before the S. Comm. on Banking, Hous. & Urb. Affs., 117th Cong. 1 (2021) (statement of John H. Cochrane), https://www.banking.​senate.​gov/​imo/​media/​doc/Cochrane%20Testimony%203-18-21.pdf [​kd5c-hbt7] (stating that regulators are “not allowed to ‘mobilize’ the financial system, to choose projects they like and de-fund those they disfavor”), and Christina Parajon Skinner, Central Banks and Climate Change, 75 Vand. L. Rev. (forthcoming 2021) (manuscript at 58), [] (arguing that the Federal Reserve Bank has limited authority to address climate change, and only on a defen­sive, rather than an offensive, basis), with Emanuele Campiglio, Yannis Dafermos, Pierre Monnin, Josh Ryan-Collins, Guido Schotten & Misa Tanaka, Climate Change Challenges for Central Banks and Financial Regulators, 8 Nature Climate Change 462, 462 (2018) (identi­fying physical and transitional risks as challenges for public financial regulators), Peter Conti-Brown & David A. Wishnick, Technocratic Pragmatism, Bureaucratic Expertise, and the Federal Reserve, 130 Yale L.J. 636, 687–99 (2021) (offering an assessment of the ways in which the Federal Reserve Bank can address climate change, among other global chal­lenges, along a spectrum of tools that promote “climate pragmatism”), and Sarah E. Light, The Law of the Corporation as Environmental Law, 71 Stan. L. Rev. 137, 205–06 (2019) [hereinafter Light, Law of Corporation] (arguing that financial and other regulators should take climate change into account more actively in interpreting their legal mandates). —the forms of private environmental governance that banks are adopting to address climate change are central to their legal, eco­nomic, and historic roles. This Essay is the first to offer a descriptive and analytical account of the tools that banks have at their disposal to lead and innovate in the private climate governance space, as well as to offer nor­mative criteria against which to evaluate the impact of these tools. 19 There is significant literature on this topic. For instance, there has been extensive scholarship in law and finance assessing specific types of sustainable financial instruments, such as the issuance of green bonds, or private environmental standards, such as the Equator Principles. See, e.g., Caroline Flammer, Corporate Green Bonds, J. Fin. Econ. (forthcoming 2021) (manuscript at 5–7) (on file with the Columbia Law Review) (finding that corporate issuers improve environmental performance after issuance of such bonds); Stephen Kim Park, Investors as Regulators: Green Bonds and the Governance Challenges of the Sustainable Finance Revolution, 54 Stan. Int’l. L.J. 1, 17–30 (2018) (assessing green bonds as a form of private environmental governance); Andrew Hardenbrook, Note, The Equator Principles: The Private Financial Sector’s Attempt at Environmental Responsibility, 40 Vand. J. Transnat’l L. 197, 226–31 (2007) (examining whether the Equator Principles have posi­tively impacted the environment); Malcolm Baker, Daniel Bergstresser, George Serafeim & Jeffrey Wurgler, Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds 5–6 (Nat’l Bureau of Econ. Rsch., Working Paper No. 25194, 2020) (sur­veying green bonds in the United States). In addition, there is an extensive literature on impact or “ESG” (Environmental, Social, and Governance) investing, including environ­mental impact investing. See, e.g., Christopher Geczy, Jessica S. Jeffers, David K. Musto & Anne M. Tucker, Contracts With (Social) Benefits: The Implementation of Impact Investing, J. Fin. Econ. (forthcoming 2021) (manuscript at 2) (on file with the Columbia Law Review) (assessing how impact fund contracts “reflect multiple goals”); Lubos Pastor, Robert F. Stambaugh & Lucian A. Taylor, Sustainable Investing in Equilibrium, J. Fin. Econ. (forth­coming 2021) (manuscript at 17) (on file with the Columbia Law Review) (“[S]ustainable investing generates positive social impact in two ways. First, it leads firms to become greener. Second, it induces more real investment by green firms and less investment by brown firms.”). While these literatures examine sustainable finance broadly, they do not always fo­cus squarely on banks. This Essay therefore aims to offer a more comprehensive assessment of the role of private climate governance by banks in this space that is not limited to a single financial instrument or class of investors. Relatedly, we recognize that there is a larger story about the role of creditors, more broadly, in climate governance. This Essay focuses on banks given the unique confluence of their historic role, current initiatives, and debt-related tools of influence and control.

Part I offers a brief primer on private environmental governance in general and private climate governance more specifically. Part II sharpens the focus to banks in particular. It con­siders how banks’ economic role and financial market structures provide incentives for these institutions to adopt private governance mechanisms and arrangements to solve prob­lems that impact both finance and society. In particular, Part II considers three such private governance arrange­ments that may extend to climate change. First, the industry has developed measures to mitigate and screen risk that can motivate borrower behavior in environmentally responsible ways. Second, and relatedly, banks’ appe­tite for risk and reward can propel them to invest in sustainable and clean energy projects with a combination of debt, equity, and advice. Third, and regarding the industry’s structure, the homogeneity and competitiveness of the banking sector compels banks to experiment together—to associate—to address public policy problems that implicate the integrity and reputation of the banking sector as a whole. Banks’ desire to solve complex, transitional problems collec­tively has, and will likely continue to, include climate change. 20 In addition to these tools, banks, like other major firms, can focus on the impact of their own operations with respect to climate change. See infra Part III. Thus, all of these actions, though private, serve information-signaling functions to other industries and all of society about risk and climate—information that is highly valuable as society transitions to a low-carbon economy.

Part III builds on the theory of Part II—that banks possess a natural propensity and aptitude for private climate governance—to offer a de­scriptive and analytical account of the specific actions that banks are taking to address climate risk and to promote the transition to a low-carbon economy. In doing so, Part III creates a novel taxonomy categoriz­ing four overarching categories of measures that banks have, to date, in­novated to address climate change. These include: (1) measures to address banks’ op­erational/onsite emis­sions; (2) the promotion of portfolio analysis, carbon emissions targets, and negative screens to reduce expo­sure to climate-re­lated risk; (3) measures by which banks undertake to accelerate or posi­tively facilitate the transition by dedicating financing, in­vesting equity, offering advice, and engaging in climate philanthropy; and (4) the use of voluntary association including the development of collec­tive industry ef­forts to establish carbon pricing, set standards around dis­closure, and brainstorm best practices. Part III shows that each of these measures ac­complishes one or more of the goals of private governance that Part II discusses—to motivate climate-positive borrower behavior, to facilitate technological development and research, to establish best prac­tices, and to increase transparency.

Part IV turns to the normative by discussing the broader impli­cations that follow from banks engaging in private environmental and climate gov­ernance. First, we explain some of the normative criteria against which the banks’ actions could be measured, including their effec­tiveness, potential for global impact, accountability, and potential for greenwashing, among others. 21 See infra section IV.A. See generally Light & Orts, Parallels, supra note 5 (suggest­ing normative criteria against which to evaluate private environmental governance) For a definition of “greenwashing,” see Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the Establishment of a Framework to Facilitate Sustainable Investment, and Amending Regulation (EU) 2019/2088, 2020 O.J. (L 198) 13, 14. Part IV concludes by offering some additional considerations that arise only in the banking context, including the relative ability of debt ver­sus equity to engage in this supervisory role with respect to other firms’ actions.