Transition risks and opportunities in residential mortgages

Arbeitspapier

A range of studies has analysed how climate-related risks can impact financial markets, focusing on equity and corporate bond holdings. This article takes a closer look at transition risks and opportunities in residential mortgages. Mortgage loans are important from a financial perspective due to their large share in banks' assets and their long credit lifetime, and from a climate perspective due to their large share in fossil fuel consumption. The analysis combines data on the energy-performance of buildings with financial data on mortgages for Germany and identifies two risk drivers - a carbon price and a performance standard. The scenario analysis shows that expected credit loss can be substantially higher for a "brown" portfolio compared to a "green" portfolio. Taking climate policy into account in risk management and strategy can reduce the transition risk and open up new lending opportunities. Financial regulation can promote such behaviour.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: DIW Discussion Papers ; No. 1910

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Energy: Government Policy ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth ; Environmental Economics: Government Policy ; Production Analysis and Firm Location: Government Policy
• Thema: Mortgages ; Residential Buildings ; Carbon Risks ; Transition Risks ; Valuation ; Climate Policy Scenarios ; Policy and Regulation

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Schütze, Franziska
• Ereignis: Veröffentlichung
• (wer): Deutsches Institut für Wirtschaftsforschung (DIW)
• (wo): Berlin
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/226822
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ