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A Market for Brown Assets To Make Finance Green

Author

Listed:
  • Mr. Domenico Fanizza
  • Laura Cerami

Abstract

This paper proposes a market solution to enhance the role of the financial sector in the green transition. Developing a secondary market for “brown exposures” can allow banks to dispose more quickly of stranded assets thereby increasing their capacity to finance green investments. Furthermore, newly created instruments – the brown assets backed securities (B-ABS) - can expand the diversification opportunities for specialized green investors and, thus, attract additional resources for new green investments. The experience of the secondary market for non-performing loans suggests that targeted policy and regulatory measures can simultaneously support the development of the secondary market for brown assets and green finance.

Suggested Citation

  • Mr. Domenico Fanizza & Laura Cerami, 2023. "A Market for Brown Assets To Make Finance Green," IMF Working Papers 2023/011, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2023/011
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