Contributor: Pierre Monnin

Climate Risks in Financial Assets

, and | 4 November 2019
Discussion Notes, Monetary | Tags: Asset prices, Climate risk, Climate stress tests
This note reviews the empirical evidence available in the academic literature about the impact of climate-related risks on financial assets. It addresses three main questions: does climate change already affect financial asset returns? What is the potential impact of future climate-related costs on financial asset ... continue reading

Prudential Regulation Can Help in Tackling Climate Change

, and | 13 February 2019
Blog, Monetary | Tags: Environment, Financial Regulation
Awareness of climate-related financial risks has been growing in the past years. Prudential frameworks however still fall short in reflecting them. Given the possible impacts of climate risks on financial stability, incorporating them into prudential regulation is rapidly moving up agendas both among academics and ... continue reading

Integrating Climate Risks into Credit Risk Assessment: Current Methodologies and the Case of Central Banks Corporate Bond Purchases

| 21 December 2018
Discussion Notes, Monetary | Tags: Climate risk, Credit risk, ECB Corporate Sector Purchase Programme
Climate change, and the transition to a low-carbon economy that can mitigate it, engender significant economic costs. These costs are ultimately borne by households and firms. They affect households’ and firms’ cash flows and wealth, which are key determinants of their credit worthiness. Climate-related costs ... continue reading

Central Banks Should Reflect Climate Risks in Monetary Policy Operations

| 10 September 2018
Monetary, Policy Briefs | Tags: Asset purchases, Central Banks, Climate risk, Collateral framework
The transition to a low-carbon economy requires a shift in capital allocation from incumbent carbon-intensive technologies to new low-carbon technologies. Financial markets play a key role in this process: they influence firms’ investment costs and serve as reference point in investors’ decisions. Currently, there ... continue reading

Climate Change and Finance: What Role for Central Banks and Financial Regulators?

, , , , and | 7 September 2018
Blog, Monetary | Tags: Central Banks, Climate Change, Environment, Financial Regulation
Climate change poses risks to the financial system. Yet our understanding of these risks is still limited. As we explain in a recent paper published in Nature Climate Change, central banks and financial regulators could contribute to the development of methodologies and modelling tools for ... continue reading