Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 10, 2022 erstellt
Description:
We examine whether banks manage climate transition risk by securitizing corporate loans. We present two novel results. First, banks are more likely to securitize loans when borrowers increase their carbon emission intensity. Second, securitization serves as a vehicle to shift transition risk, especially when banks do not have market power to price transition risk into loan contracts. Exploiting the Trump election as an exogenous shock to transition risk, we establish a causal link between transition risk and loan securitization. Our estimates show stronger effects for banks that do not exhibit preference for sustainable lending and domestic lenders. We discuss how our paper speaks to the debate on the design of bank climate policies