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Green Stocks and the 2023 Banking Crisis

Author

Listed:
  • Francesco D'Ercole

    (LUM University)

  • Alexander F. Wagner

    (University of Zurich ; Swiss Finance Institute; CEPR; and ECGI)

Abstract

In prior financial and economic crises such as the Global Financial Crisis and COVID-19, environmentally responsible stocks performed well or at least neutrally. Were they also resilient as another banking crisis began unfolding with the collapse of Silicon Valley Bank (SVB) and Signature Bank? Or did they suffer because of the important role that these and other regional banks play for the clean tech sector? We find that stocks with more opportunities in the transition to a low-carbon economy performed worse in the 2023 crisis. Investors favored firms with low debt. Overall, the market appears to anticipate that the (regional) banking sector stress will curtail climate tech development.

Suggested Citation

  • Francesco D'Ercole & Alexander F. Wagner, 2023. "Green Stocks and the 2023 Banking Crisis," Swiss Finance Institute Research Paper Series 23-58, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2358
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    More about this item

    Keywords

    Bank failure; Clean tech; ESG; Event study; Financial crisis; Silicon Valley Bank;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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