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Bank Bond Holdings and Bail-in Regulatory Changes: Evidence from Euro Area Security Registers

Author

Listed:
  • Angie Andrikogiannopoulou

    (King’s College London)

  • Philipp Krueger

    (University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; European Corporate Governance Institute (ECGI); University of Geneva - Geneva School of Economics and Management)

  • Shema Frédéric Mitali

    (SKEMA Business School)

  • Filippos Papakonstantinou

    (King’s College London)

Abstract

We construct novel measures of mutual funds’ environmental, social, and governance (ESG) commitment by analyzing the discretionary investment-strategy descriptions of their prospectuses. We find that fund flows respond strongly to such text-based ESG measures. Using discrepancies between text- and fundamentals-based ESG measures, we identify greenwashing. We find that greenwashing is more prevalent since ESG issues have started attracting mainstream attention and among funds with lower past flows and weaker oversight. Furthermore, greenwashers attract similar flows but have worse performance than genuinely-green funds, suggesting that investors cannot distinguish them and suffer welfare losses. Our methodology could help regulators combat ESG-related misconduct.

Suggested Citation

  • Angie Andrikogiannopoulou & Philipp Krueger & Shema Frédéric Mitali & Filippos Papakonstantinou, 2025. "Bank Bond Holdings and Bail-in Regulatory Changes: Evidence from Euro Area Security Registers," Swiss Finance Institute Research Paper Series 25-43, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2543
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    More about this item

    Keywords

    ESG; Prospectus; Greenwashing; Text Analysis; Mutual Funds; Fund Flows; Fund Performance;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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