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Working Paper
Industrial Composition of Syndicated Loans and Banks’ Climate Commitments
In the past two decades, a number of banks joined global initiatives aimed to mitigate climate change by “greening” their asset portfolios. We study whether banks that made such commitments have a different emission exposure of their portfolios of syndicated loans than banks that did not. We rely on loan-level information with global coverage combined with country-industry information on emissions. We find that all banks have reduced their loan-emission exposures over the last 8 years. However, we do not find differences between banks that did and those that did not signal their ...
Working Paper
The Green Corporate Bond Issuance Premium
We study a global panel of green and conventional bonds to assess the borrowing cost advantage at issuance for green bond issuers. We find that, on average, green bonds have a yield spread that is 8 basis points lower relative to conventional bonds. This borrowing cost advantage, or greenium, emerges as of 2019 and coincides with the growth of the sustainable asset management industry following EU regulation. Within this context, we find that the greenium is linked to two proxies of demand pressure, bond oversubscription and bond index inclusion. Moreover, while green bond governance appears ...
Working Paper
Central Bank Communication about Climate Change
This paper applies natural language processing to a large corpus of central bank speeches to identify those related to climate change. We analyze these speeches to better understand how central banks communicate about climate change. By all accounts, communication about climate change has accelerated sharply in recent years. The breadth of topics covered is wide, ranging from the impact of climate change on the economy to financial innovation, sustainable finance, monetary policy, and the central bank mandate. Financial stability concerns are touched upon, but macroprudential policy is rarely ...