Fostering green investments and tackling climate-related financial risks: Which role for macroprudential policies?

By Paola D'Orazio, Lilit Popoyan. Ecological Economics, 2019

320 citations recorded by the source corpus.

Abstract While there is a growing debate among researchers and practitioners on the possible role of central banks and financial regulators in supporting a smooth transition to a low-carbon economy, the information on which macroprudential instruments could be used for reaching the “green structural change” is still quite limited. Moreover, the achievement of climate goals is still affected by the so-called “green finance gap”. This paper addresses these issues by proposing a critical review of existing and novel prudential approaches to incentivizing the decarbonization of banks' balance sheets and aligning finance with sustainable growth and development objectives. The analysis carried out in the paper allows understanding of under which conditions macroprudential policy could tackle climate change and promote green lending, while also containing climate-related financial risks.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/88f13aad523a78b69e26af1ff9be300e45e145c0

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Citations in the corpus

• A review of studies on green finance of banks, research gaps and future directions (2021, background): “Climate finance The climate finance from banks aims at creating funds to address the climate crisis such as greenhouse gas emissions from industry and all human activities to ensure the resilience of weather, and the wellbeing of humanity (D’Orazio and Popoyan 2019; D’Orazio and Valente 2019).”