Does climate policy uncertainty affect the top financiers of the energy sector?

  • Z Anwer
  • , Z Boulanouar*
  • , S Farid
  • , Milena Migliavacca
  • *Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivistaArticolo

Abstract

We examine dynamic co-movements and the dependence structure between the news-based climate policy uncertainty index and distance to default as well as market returns of the top US banks that finance fossil-fuel companies. We utilize Wavelet Coherence approach to examine this relationship in time-frequency domain for the period August 1999 to June 2023. The results suggest that both Distance-to-Default and the returns of US banks do not exhibit strong co-movement and long-term interdependence with climate-related risks. Although there are a few short-term episodes of heightened interlinkages, such trends are not persistent in the long run. The episodes of soaring interdependencies coincide with significant climate action events. The findings imply that since major US banks financing the fossil-fuel industry hold diversified financing portfolios, their stability and market performance is not substantially affected by the performance and stability of fossil fuel companies in the long run. The results carry important implications for investors and policy makers related to environmental regulations and policy effectiveness, financial stability, risk management and asset allocation.
Lingua originaleInglese
pagine (da-a)N/A-N/A
RivistaINTERNATIONAL REVIEW OF ECONOMICS & FINANCE
Numero di pubblicazioneN/A
DOI
Stato di pubblicazionePubblicato - 2025

All Science Journal Classification (ASJC) codes

  • Finanza
  • Economia ed Econometria

Keywords

  • Climate policy uncertainty
  • Distance to default
  • Energy
  • Fossil-fuel
  • Risk

Fingerprint

Entra nei temi di ricerca di 'Does climate policy uncertainty affect the top financiers of the energy sector?'. Insieme formano una fingerprint unica.

Cita questo