Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305279 
Year of Publication: 
2024
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 41/2024
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
The average yield differential between a green and a matched conventional bond ("greenium") amounts to minus 3 basis points. We decompose this greenium along the bonds' ownership structure and document that investment funds, banks and insurance companies pay most of it. Dissecting further, the greenium paid by investment funds (and their clients) is mostly explained by an average level effect, confirming the narrative that these investors have non-pecuniary sustainability preferences. The greenium paid by banks is markedly different and cannot be explained by such preferences. Rather banks overweight specific green bonds with a sizeable greenium, pointing towards an interaction between the greenium and bank-related financial frictions.
Subjects: 
Green bonds
sustainable investment
greenium
ownership structure
securities holdings
JEL: 
G11
Q01
ISBN: 
978-3-98848-016-3
Document Type: 
Working Paper

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