Responsibility for financial and macroeconomic stability implicitly or explicitly lies with the central bank, which therefore ought to address climate-related and other environmental risks on a systemic level. Furthermore, central banks, through their regulatory oversight over money, credit, and...

There is growing presumption that central banks have a significant role to play in addressing environmental challenges, especially climate change. This article explains, on the basis of both theoretical and empirical evidence, that attempting to use existing central bank powers to tackle climate...

The 2015 Paris Agreement is a landmark in limiting emissions and targeting global warming well below 2, preferably 1.5, degrees Celsius compared to pre-industrial levels. In this light, we investigate how to efficiently construct equity portfolios that help mitigating climate change risk but at...

Chapter 1. Financial Risk Management and Climate Change Risk -- Part 1. Monetary Policy and Financial Risk Management -- Chapter 2. The Cost of Unconventional Monetary Policy Measures. A Risk Manager's Perspective -- Chapter 3. The Eurosystem Collateral Framework and the Measures Introduced in...

Dynamic programming is the essential tool in dynamic economic analysis. Problems such as portfolio allocation for individuals and optimal economic growth are typical examples. Numerical methods typically approximate the value function. Recent work has focused on making numerical methods more...

Numerous studies have shown that international emissions trading can significantly lower the costs of greenhouse gas (GHG) abatement. Economic models, however, ignore the substantial economic and political risks associated with investments in developing countries, where -according to these...

We propose and implement a procedure to optimally hedge climate change risk. First, we construct climate risk indices through textual analysis of newspapers. Second, we present a new approach to compute factor mimicking portfolios to build climate risk hedge portfolios. The new mimicking...