The U.S. Federal Reserve and other bank regulators should force banks to hold more cash to guard against potential losses due to climate change and possible steps to fight it, one of Washington"s top liberal think tanks said on Tuesday. The plan, published by the Center for American Progress and seen first by Reuters, is likely to inform a looming debate about exactly how far bank regulators should go in policing climate change as the Biden administration looks to tackle the issue on all fronts. The paper argues that regulators could move quickly to bolster banks" capital cushions by establishing several new safeguards, including a new capital surcharge directly tied to how much pollution banks directly finance and heightened stress tests of big banks that incorporate climate risks. Several of the changes are likely to be strongly opposed by Wall Street, and regulators, led by the Fed, have taken a much more deliberate approach to climate than sought by progressive Democrats. After lagging European counterparts on climate change under the Trump administration, the Fed has ramped up efforts in recent months, including devoting new staff specifically to exploring how climate change could affect the economy and the financial system. But the Fed has yet to adopt any new policies in response to climate change, which some argue are already overdue. “It’s positive they at least have acknowledged the severity or potential severity of these risks," said Gregg Gelzinis, a senior policy analyst who wrote the paper. "I give them credit for that, but it’s not going to provide a lot of comfort if we don’t see action." The paper argues regulators should move quickly, directing banks to hold more capital if they are exposed to more heavily polluting industries, saying they could lose value as the world moves toward cleaner industries. It adds the Fed should go farther with the largest banks, imposing a new capital surcharge directly tied to how much carbon they finance with their activities. The report also called on the Fed to create a new exercise to test banks" resilience to climate change over the long term, as well as integrate near-term climate risk into the existing annual stress test of bank finances.