A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
- Topic classification is ongoing.
- Please kindly let me know [mingze.gao@mq.edu.au] in case of any errors.
Banking on Carbon: Corporate Lending and Cap-and-Trade Policy
Resource type
Authors/contributors
- Ivanov, Ivan T (Author)
- Kruttli, Mathias S (Author)
- Watugala, Sumudu W (Author)
Title
Banking on Carbon: Corporate Lending and Cap-and-Trade Policy
Abstract
We estimate the effect of carbon pricing policy on bank credit to greenhouse-gas-emitting firms. Our analyses exploit the geographic restrictions inherent in California’s cap-and-trade bill and a discontinuity in the embedded free permit threshold of the federal Waxman-Markey cap-and-trade bill. Affected high emission firms face shorter loan maturities, lower access to permanent forms of bank financing, higher interest rates, and higher participation of shadow banks in their lending syndicates. These effects are concentrated among private firms, while credit terms of public firms are largely unaffected. Overall, we show that banks respond quickly to realizations of transition risk.
Publication
The Review of Financial Studies
Volume
37
Issue
5
Pages
1640-1684
Date
2024-05-01
Journal Abbr
The Review of Financial Studies
ISSN
0893-9454
Short Title
Banking on Carbon
Accessed
5/1/24, 10:14 AM
Library Catalog
Silverchair
Citation
Ivanov, I. T., Kruttli, M. S., & Watugala, S. W. (2024). Banking on Carbon: Corporate Lending and Cap-and-Trade Policy. The Review of Financial Studies, 37, 1640–1684.
Link to this record