Climate risk has become a major concern for financial institutions and financial markets. Yet, climate policy is still … the variety of definitions for green activities lower the value of existing and new capital, and complicate risk … management. This column argues that it would be welfare-enhancing if policy changes were to follow a predictable longer-term path …

contribute to scale up new green investments, or introduce new sources of risk for financial stability, is poor. In addition, the … banking sector's reaction to the policy announcements i.e. the climate sentiments via a revision of the lending conditions … economy and on the credit market conditions. We analyze the risk transmission channels from the credit market to the economy …

Does a shift to ambitious climate policy increase financial fragility? In this paper, we develop a quantitative … ambitious climate policy is positive for low but empirically plausible social discount rates. …