Böser, Florian; Colesanti Senni, Chiara - 2021 - This Version: June 2, 2021
bank are one possible instrument to address this issue. CAROs are characterized by interest rates on reserve loans, which … depend on the climate risk exposure of the assets held by the borrowing bank. If private agents and the central bank have … the central bank's perspective, suboptimal and may lead to financial instability. We find that an appropriate design of …