Using a sample of 27 countries between 1990 and 2014, we find that banks charge higher interest rates and adjust other contractual features of their loans when lending to firms facing more stringent environmental regulations. Our evidence suggests that lenders' concerns about the increase in...

Using data from 41 different countries including the United States, we provide novel empiricalevidence that firms increase their cash holdings as a response to climate risk. This effect is drivenby financially constrained firms and becomes significantly stronger after the release of the...