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The carbon bubble and the pricing of bank loans


Delis, Manthos; De Greiff, Kathrin; Ongena, Steven (2018). The carbon bubble and the pricing of bank loans. London: VoxEU, CEPR Policy Portal.

Abstract

Neglecting the possibility that fossil fuel reserves can become ‘stranded’ could result in a ‘carbon bubble’ as fossil fuel firms become overvalued. This column studies whether banks price the climate policy risk of fossil fuel firms. Prior to 2015, banks did not appear to price climate policy risk. After 2015, however, the risk is priced to a certain extent, especially for firms holding more fossil fuel reserves.

Abstract

Neglecting the possibility that fossil fuel reserves can become ‘stranded’ could result in a ‘carbon bubble’ as fossil fuel firms become overvalued. This column studies whether banks price the climate policy risk of fossil fuel firms. Prior to 2015, banks did not appear to price climate policy risk. After 2015, however, the risk is priced to a certain extent, especially for firms holding more fossil fuel reserves.

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Additional indexing

Item Type:Scientific Publication in Electronic Form
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Date:27 May 2018
Deposited On:22 Feb 2019 15:48
Last Modified:08 Jul 2020 15:52
Publisher:VoxEU, CEPR Policy Portal
OA Status:Closed
Free access at:Official URL. An embargo period may apply.
Official URL:https://voxeu.org/article/carbon-bubble-and-pricing-bank-loans
Other Identification Number:merlin-id:16393

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