As part of a broader policy agenda promoting more sustainable financial markets, legislative and policy initiatives within the European Union in recent years have explored the activation of micro-prudential requirements for banks and other financial intermediaries with a view to incentivise...

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...

Banks are exposed to climate risks through stranded assets. This risk can be substantial in the banking sector, as it can spawn systemic risk. After the Great Recession, macro-prudential instruments effectively addressed systemic risk. However, climatic risks raise the research question of how...

Federal banking regulators are grappling with how to confront the threats posed by climate change. There are increasingly loud calls for regulators to adjust the “risk-weights” used to calculate banks’ minimum capital requirements based on how exposed their counterparties are to...

The urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a...

There is growing recognition that natural disasters and severe weather-related events pose risks that can potentially and unintentionally affect the financial performance of the banking system. This study provides further indication that severe weather conditions have an impact on the financial...