Which Macroprudential Policy in the Face of Climate ?
Speakers:
Pierre Monnin – CEP
Thierry Philipponnat – Finance Watch
Olivier de Bandt – Director of Research, Banque de France
Discussion Moderators:
Jézabel Couppey-Soubeyran (Université Paris 1 Panthéon-Sorbonne; Institut Veblen)
Dominique Plihon (Université Sorbonne Paris Nord)
Overview:
It is now widely recognized that climate disruption generates specific risks for banks and for the stability of the banking system. Insufficient or poorly adapted regulation that allows banks to continue financing the extraction and use of fossil fuels can exacerbate global warming and, consequently, increase systemic banking instability (double materiality).
Regulators have begun to adapt prudential regulation to these new risks, including measures such as climate stress tests. Economists have proposed additional measures to strengthen these efforts, such as climate buffers complementing capital ratios, and sectoral leverage ratios designed to align bank financing flows with the goals of the Paris Agreement.
This seminar aimed to present and discuss these recent adaptations to the prudential framework. The presentations included:
- Pierre Monnin (CEP): Analysis of macroprudential policy adaptation and proposals for climate capital buffers modeled on systemic buffers.
- Thierry Philipponnat (Finance Watch): Discussion of the limits of current macroprudential policy and the need for new instruments, including sectoral leverage ratios and credit-guiding tools.-
- Olivier de Bandt (Banque de France): Reactions to the previous presentations and an overview of supervisory measures to support the ecological transition.
Date and Location:
Monday, December 9, 2024
Maison des Sciences Économiques, 112 Bd de l’Hôpital, 75013 Paris