IWH-DPE Call for Applications – Fall 2020 Intake
Vacancy The Halle Institute for Economic Research (IWH) is one of Germany’s leading economic research institutes. The IWH focuses on research in macroeconomics, financial…
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IWH-DPE Call for Applications – Fall 2020 Intake
Vacancy The Halle Institute for Economic Research (IWH) is one of Germany’s leading economic research institutes. The IWH focuses on research in macroeconomics, financial…
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IT Information
IT Information The respective contact person is indicated in brackets. Datastream (Jan Neumann) Privacy Rules in Zoom (in German) (Robert Cremer) MacOS Printing (Jan Neumann)…
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Behavior in Case of Fire
Behavior in Case of Fire Fire Safety Regulations (short version, german) Fire Safety Regulations (long version, german) How fire can be prevented and what to do in case of fire.
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Parental Leave
Parental Leave Parental leave enables mothers and fathers to find a balance between family and work in the first years of the newborn child. The Letter to Mothers and Fathers…
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Operating Agreements
Operating Agreements Operating Agreement and Career Possibilities Working Time Regulations Berufliche Aus- und Weiterbildung (in German) Occupational Integration Management (BEM)…
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IT User Regulations
IT User Regulations IT User Regulations (Jan Neumann)
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Terms of Use
Terms of Use Regulations on Use of the IWH Library
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Loan Securitisation during the Transition to a Low-carbon Economy
Isabella Müller, Huyen Nguyen, Trang Nguyen
VoxEU CEPR,
May
2023
Abstract
Banks play a crucial role in the transition to a low-carbon economy, but they also expose themselves to climate transition risk. This column shows that banks use corporate loan securitisation to shift climate transition risk to less-regulated shadow banking entities. This behaviour affects carbon premia in loan contracts. When banks can use securitisation to manage transition risk, their climate policies that target only activities reflected in their books may not be as effective as bank regulators hope for.
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Short-Selling Threats and Bank Risk-Taking: Evidence from the Financial Crisis
Dien Giau Bui, Iftekhar Hasan, Chih-Yung Lin, Hong Thoa Nguyen
Journal of Banking and Finance,
May
2023
Abstract
The focus of this paper is whether the Securities and Exchange Commission's Regulation SHO strengthens or weakens the effect of short-selling threats on banks’ risk-taking. The evidence shows that pilot banks with looser constraints on short-selling increased their risk-taking during the financial crisis of 2007–2009. The reason is that short-selling threats improved the information environment and mitigated the agency problems of banks during the pilot program that led to greater risk-taking by pilot banks. Additionally, this effect is mainly driven by pilot banks with poor corporate governance, or high information asymmetry. Overall, our paper provides novel evidence that the disciplinary role of short-sellers had a positive effect on bank risk-taking during the financial crisis.
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