Arbeitspapier
Do banks price environmental risk? Evidence from a quasi natural experiment in the People's Republic of China
This paper maps the risk arising from the transition to a low-emission economy and studies its transmission channels within the financial system. The environmental dynamic stochastic general equilibrium (E-DSGE) model shows that tightening environmental regulations deteriorates firms' balance sheets as it internalizes the pollution costs, which consequentially accelerates the risks that the financial system faces. This empirical study, which employs the Clean Air Action that the Chinese government launched in 2013 as a quasi-experiment, supports the theoretical implications. The analysis of a unique dataset containing 1.3 million loans shows that the default rates of high-polluting firms rose by around 50% along their environmental policy exposure. At the same time, the loan spread charged to such firms increased by 5.5% thereafter, indicating that the banks do price the environment-related risks, but not sufficiently.
- Sprache
-
Englisch
- Erschienen in
-
Series: ADBI Working Paper Series ; No. 974
- Klassifikation
-
Wirtschaft
Business Fluctuations; Cycles
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
Energy and the Macroeconomy
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Thema
-
Environmental DSGE Model
Clean Air Action
lending spread
default rate
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Huang, Bihong
Punzi, Maria Teresa
Wu, Yu
- Ereignis
-
Veröffentlichung
- (wer)
-
Asian Development Bank Institute (ADBI)
- (wo)
-
Tokyo
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Huang, Bihong
- Punzi, Maria Teresa
- Wu, Yu
- Asian Development Bank Institute (ADBI)
Entstanden
- 2019
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