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Climate Change In The Discourse Of Central Banks. Influence On Financial Stability At The European Level

Author

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  • LUPU Iulia

    (“Victor Slavescu” Centre for Financial and Monetary Research, Romania)

  • CRISTE Adina

    (“Victor Slavescu” Centre for Financial and Monetary Research, Romania)

Abstract

Climate change and environmental constraints are the biggest challenges facing the economy and society. Because they influence price and financial stability, controversial or trade-off decisions are sometimes required. In recent years, we have observed an increasing interest concerning central banks' role in addressing these issues and supporting green finance development. This article proposes to evidence the impact of central banks' climate change discourse on financial stability at the European banking level, considering their role in financial stability. We employed an event study methodology on systemic risk measures computed for 181 banks listed on European stock exchanges, using daily observations for 2015-2021. On the other side, we identified speeches of European central bank governors related to their involvement in climate change policy. The empirical results confirm the assumption that participation by central banks generally has positive effects on financial stability and some concrete measures were visible. While central banks cannot make climate policy and are not the critical element in this area, along with other economic, financial and governmental institutions, they can play an important role.

Suggested Citation

  • LUPU Iulia & CRISTE Adina, 2023. "Climate Change In The Discourse Of Central Banks. Influence On Financial Stability At The European Level," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 18(2), pages 235-246, August.
    • Handle: RePEc:blg:journl:v:18:y:2023:i:2:p:235-246
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    References listed on IDEAS

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    1. Gambacorta, Leonardo & Pancotto, Livia & Reghezza, Alessio & Spaggiari, Martina, 2022. "Gender diversity in bank boardrooms and green lending: Evidence from euro area credit register data," CEPR Discussion Papers 17650, C.E.P.R. Discussion Papers.
    2. Tudor Ciumara & Iulia Lupu, 2020. "Green Procurement Practices in Romania: Evidence from a Survey at the Level of Local Authorities," Sustainability, MDPI, vol. 12(23), pages 1-12, December.
    3. Claudia Ogrean & Mihaela Herciu, 2020. "Business Models Addressing Sustainability Challenges—Towards a New Research Agenda," Sustainability, MDPI, vol. 12(9), pages 1-28, April.
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    Cited by:

    1. Mertzanis, Charilaos, 2024. "Central bank policies and green bond issuance on a global scale," Energy Economics, Elsevier, vol. 133(C).

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