2022. September 30. 11:49

Possible Real Economic Consequences of Financial Actors’ Attitudes Towards Climate Change and Realized Risks

Péter Málits
Consulting Intern,
EY, Corvinus University of Budapest

Márton El-Meouch Nedim
PhD Student, Analyst,
University of Pécs, Doctoral School of Earth Sciences; National Bank
of Hungary

Áron Drabancz
PhD Student, Analyst,
Corvinus University of Budapest, Doctoral School of Economics
and Business Informatics; National Bank of Hungary

Published in: Public Finance Quarterly 2022/3. (p. 430-447.)

Summary: The effects of climate change on the real economy are also reflected in the financial system. In this study, we examine the attitudes of key players in the financial system (central and commercial banks) towards the financial risks of climate change, based on the literature in the field. The key players in the financial system, the climate change-specific relationships of the corporate sector and the main channels connecting them are illustrated using a corporate project evaluation model, partly assessing which variables and risks a company should consider when making an investment decision. The results show that climate change can affect the performance of financial institutions in a number of ways, but these risks cannot yet be clearly identified in Hungarian interest rate spreads.

Keywords: climate change, financial institutions, interest rate spread

JEL codes: H43, Q56

DOI: https://doi.org/10.35551/PFQ_2022_3_7 

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