Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334153 
Year of Publication: 
2025
Citation: 
[Journal:] Asian Journal of Economics and Banking (AJEB) [ISSN:] 2633-7991 [Volume:] 9 [Issue:] 3 [Year:] 2025 [Pages:] 418-436
Publisher: 
Emerald, Leeds
Abstract: 
This paper examines the impact of climate-related financial policies (CFPs) on bank risks, utilizing a comprehensive global dataset spanning from 2000 to 2021. It explores whether CFPs influence bank risk levels across different regions and regulatory environments.Using a dataset comprising 2,534 bank-year observations, this study employs robust econometric techniques, including two-stage least squares (2SLS) and difference-in-differences (DiD) approaches, to mitigate endogeneity concerns and validate the findings. The analysis distinguishes between regions with strong regulatory frameworks, such as North America and Europe, and those with weaker regulatory settings, such as Asia and developing countries.CFPs generally reduce bank risks in regions with strong regulatory frameworks, such as North America and Europe. However, in Asia and developing countries, CFPs initially increase risks, highlighting transitional challenges. Environmental sustainability factors moderate this relationship, with stronger CFP effects in countries with weaker environmental policies. These findings align with stakeholder theory and the resource-based view.This study provides critical insights for policymakers and financial regulators by highlighting the need for region-specific CFP implementation strategies. While CFPs enhance bank resilience to climate-related risks, their effectiveness depends on regulatory maturity and economic conditions. Financial institutions must integrate tailored risk management strategies to navigate the short-term challenges associated with CFP adoption in developing economies.Evidence from this research provides on the differential effects of CFPs on bank risks across diverse regulatory and economic contexts, offering insights into financial policy effectiveness.
Subjects: 
Climate-related financial policies
Bank risk
Financial regulation
Environmental sustainability
JEL: 
M14
G28
G21
Q58
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.