This seminar is part of the SAFE Brown Bag Seminar Series, a seminar series for researchers affiliated with SAFE. Organized by the Leibniz Institute SAFE, the series provides an informal platform for presenting and discussing ongoing research and regularly features invited external speakers. The meeting takes place in the SAFE Common Room on Wednesday, 12.00-13.00.
Speaker: Marco Pagano (University of Naples Federico II)
Marco Pagano will present a paper titled "Climate Risk, Bank Lending and Monetary Policy" joint work with Carlo Altavilla, Miguel Boucinha, Andrea Polo.
Abstract:
Combining euro-area credit register and carbon emission data, we provide evidence of a climate risk-taking channel in banks’ lending policies. Banks charge higher interest rates to firms featuring greater carbon emissions, and lower rates to firms committing to lower emissions, controlling for their probability of default. Both effects are larger for banks committed to decarbonization. Consistent with the risk-taking channel of monetary policy, tighter policy induces banks to increase both credit risk premia and carbon emission premia and reduce lending to high-emission firms more than to low-emission ones. While restrictive monetary policy increases the cost of credit and reduces lending to all firms, its contractionary effect is milder for firms with low emissions and those that commit to decarbonization.
If you have questions, feel free to contact Alessandro Gastaldello.
