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20
result(s)
Extreme Weather and Low-Income Household Finance: Evidence from Payday Loans
Staff Working Paper 2024-1
Shihan Xie,
Victoria Wenxin Xie,
Xu Zhang
This paper explores the impact of extreme weather exposures on the financial outcomes of low-income households. Our findings highlight the heightened financial vulnerability of low-income households to environmental shocks and underscore the need for targeted policies.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Credit and credit aggregates
JEL Code(s):
G,
G5,
Q,
Q5,
Q54
Climate-Related Flood Risk to Residential Lending Portfolios in Canada
Staff Discussion Paper 2023-33
Craig Johnston,
Geneviève Vallée,
Hossein Hosseini,
Brett Lindsay,
Miguel Molico,
Marie-Christine Tremblay,
Aidan Witts
We assess the potential financial risks of current and projected flooding caused by extreme weather events in Canada. We focus on the residential real estate secured lending (RESL) portfolios of Canadian financial institutions (FIs) because RESL portfolios are an important component of FIs’ balance sheets and because the assets used to secure such loans are immobile and susceptible to climate-related extreme weather events.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Climate change,
Credit risk management,
Econometric and statistical methods,
Financial institutions,
Financial stability
JEL Code(s):
C,
C8,
C81,
G,
G2,
G21,
Q,
Q5,
Q54
Understanding the Systemic Implications of Climate Transition Risk: Applying a Framework Using Canadian Financial System Data
Staff Discussion Paper 2023-32
Gabriel Bruneau,
Javier Ojea Ferreiro,
Andrew Plummer,
Marie-Christine Tremblay,
Aidan Witts
Our study aims to gain insight on financial stability and climate transition risk. We develop a methodological framework that captures the direct effects of a stressful climate transition shock as well as the indirect—or systemic—implications of these direct effects. We apply this framework using data from the Canadian financial system.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Climate change,
Economic models,
Financial institutions,
Financial markets,
Financial stability
JEL Code(s):
C,
C6,
C63,
G,
G0,
G01,
G1,
G10,
G2,
G20,
Q,
Q5,
Q54
Supporting the Transition to Net-Zero Emissions: The Evolving Role of Central Banks
Staff Discussion Paper 2023-31
Karen McGuinness
While climate change was largely tackled by government policies in the past, central banks are increasingly grappling with the risks climate change poses. They are evaluating their operational policies to reflect these risks and the transition to a net-zero economy. This paper explores the trade-offs and considerations central banks face.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Climate change,
Financial markets
JEL Code(s):
D,
D5,
D53,
E,
E5,
E58,
E6,
E63,
G,
G3,
G32,
Q,
Q5,
Q54
Is Climate Transition Risk Priced into Corporate Credit Risk? Evidence from Credit Default Swaps
Staff Working Paper 2023-38
Andrea Ugolini,
Juan C. Reboredo,
Javier Ojea Ferreiro
We study whether the credit derivatives of firms reflect the risk from climate transition. We find that climate transition risk has asymmetric and significant economic impacts on the credit risk of more vulnerable firms, and negligible effects on other firms.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Credit risk management,
Econometric and statistical methods
JEL Code(s):
C,
C2,
C24,
G,
G1,
G12,
G3,
G32,
Q,
Q5,
Q54
An Investigation into the Effects of Border Carbon Adjustments on the Canadian Economy
Staff Working Paper 2023-27
Y.-H. Henry Chen,
Hossein Hosseini,
Craig Johnston,
Sergey Paltsev,
Marie-Christine Tremblay
We examine the economic implications of border carbon adjustments (BCAs) for Canada. We find that, BCAs, in the form of import tariffs, reduce Canada’s carbon leakage and improve its competitiveness when Canada is part of a broad coalition of BCA-implementing countries. Welfare also improves when tariff revenues are transferred to households.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
International topics,
Trade integration
JEL Code(s):
C,
C6,
C68,
F,
F1,
H,
H2,
Q,
Q3,
Q37,
Q5
What we can learn by linking firms’ reported emissions with their financial data
Staff Analytical Note 2023-4
Matthew Ackman,
Timothy Grieder,
Callie Symmers,
Geneviève Vallée
We analyze the financial statements and stock prices of publicly traded firms incorporated in Canada that report greenhouse gas emissions. We find that these firms primarily use equity financing. We also find that equity investors increasingly account for firms’ emissions when making investment decisions but the impact appears small. This suggests that assets exposed to climate change remain at risk of a sudden repricing.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Asset pricing,
Climate change,
Financial stability,
Firm dynamics
JEL Code(s):
G,
G1,
G3,
Q,
Q5
Cost Pass-Through with Capacity Constraints and International Linkages
Staff Working Paper 2023-16
Reinhard Ellwanger,
Hinnerk Gnutzmann,
Piotr Śpiewanowski
How are regional cost shocks passed through into global prices? We investigate the role of short-run capacity constraints and show that they can induce stark non-linearities in the pass-through. We highlight this effect for the market for ammonia, a commodity produced largely from natural gas.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Econometric and statistical methods,
Inflation and prices,
International topics
JEL Code(s):
L,
L1,
L13,
L6,
L65,
Q,
Q4,
Q40,
Q5,
Q54
We Didn’t Start the Fire: Effects of a Natural Disaster on Consumers’ Financial Distress
Staff Working Paper 2023-15
Anson T. Y. Ho,
Kim Huynh,
David T. Jacho-Chávez,
Geneviève Vallée
We use detailed consumer credit data to investigate the impact of the 2016 Fort McMurray wildfire, the costliest wildfire disaster in Canadian history, on consumers’ financial stress. We focus on the arrears of insured mortgages because of their important implications for financial institutions and insurers’ business risk and relevant management practices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Credit and credit aggregates,
Econometric and statistical methods,
Financial stability
JEL Code(s):
C,
C2,
C21,
D,
D1,
D12,
G,
G2,
G21,
Q,
Q5,
Q54