Climate stress tests, bank lending, and the transition to the carbon-neutral economy / Larissa Fuchs, Huyen Ngyuen, Trang Nguyen, Klaus Schaeck ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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Climate stress tests, bank lending, and the transition to the carbon-neutral economy
Discovery
1891010956
URN
urn:nbn:de:gbv:3:2-1065442
DOI
ISBN
ISSN
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [2024?]
Content
1 Online-Ressource (III, 60 Seiten, 0,93 MB) : Diagramme
Edition
This version: 10.06.2024
Language
eng
Comment
Literaturverzeichnis: Seite 33-36
Abstract
We ask if bank supervisors’ efforts to combat climate change affect banks' lending and their borrowers’ transition to the carbon-neutral economy. Combining information from the French supervisory agency’s climate pilot exercise with borrowers' emission data, we first show that banks that participate in the exercise increase lending to high-carbon emitters but simultaneously charge higher interest rates. Second, participating banks collect new information about climate risks, and boost lending for green purposes. Third, receiving credit from a participating bank facilitates borrowers’ efforts to improve environmental performance. Our findings establish a hitherto undocumented link between banking supervision and the transition to net-zero.
Series
IWH-Diskussionspapiere ; 2024, no. 9 (March 2024) [rev.] ppn:837399270