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Central banks, climate risks and sustainable finance

Author

Listed:
  • Enrico Bernardini

    (Bank of Italy)

  • Ivan Faiella

    (Bank of Italy)

  • Luciano Lavecchia

    (Bank of Italy)

  • Alessandro Mistretta

    (Bank of Italy)

  • Filippo Natoli

    (Bank of Italy)

Abstract

In the last few years, the climate changes under way and the transition towards a sustainable economic development model have become of great importance for the financial system, involving central banks as well. The latter, whose interest is demonstrated by the work of the Network for Greening the Financial System (NFGS), are taking on the challenges posed by these events as part of their institutional and investment activities. By means of internal study projects and by taking part in the most important round tables at national and international level, the Bank of Italy is helping to analyse the risks that climate change creates for the economic and financial system. In addition, and in line with the recent developments in sustainable finance, it has also integrated sustainability criteria into its investment decisions. This paper aims to give an account of the evidence collected so far on the risks and opportunities linked to climate change and sustainable finance, highlighting what has already been done and what else can be done to put these issues on the agenda of central banks.

Suggested Citation

  • Enrico Bernardini & Ivan Faiella & Luciano Lavecchia & Alessandro Mistretta & Filippo Natoli, 2021. "Central banks, climate risks and sustainable finance," Questioni di Economia e Finanza (Occasional Papers) 608, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_608_21
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    Cited by:

    1. Ferriani, Fabrizio, 2023. "Issuing bonds during the Covid-19 pandemic: Was there an ESG premium?," International Review of Financial Analysis, Elsevier, vol. 88(C).
    2. Gambacorta, Leonardo & Pancotto, Livia & Reghezza, Alessio & Spaggiari, Martina, 2022. "Gender diversity in bank boardrooms and green lending: evidence from euro area credit register data," Working Paper Series 2741, European Central Bank.
    3. Faiella, Ivan & Lavecchia, Luciano & Michelangeli, Valentina & Mistretta, Alessandro, 2022. "A climate stress test on the financial vulnerability of Italian households and firms," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 396-417.
    4. Simone Letta & Pasquale Mirante, 2023. "Investigating the determinants of corporate bond credit spreads in the euro area," Temi di discussione (Economic working papers) 36, Bank of Italy, Economic Research and International Relations Area.
    5. Clara Isabel González Martínez, 2021. "The role of central banks in combating climate change and developing sustainable finance," Economic Bulletin, Banco de España, issue 3/2021.

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    More about this item

    Keywords

    Bank of Italy; central banks; climate risks; sustainable finance;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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