Another Boiling Frog: the impact of climate-related events on financial outcomes in Brazil

Juliano Assunção, Flávia Chein, Giovanni Frisari and Sérgio Koyama
Authors registered in the RePEc Author Service: Flávia Chein Feres

No 572, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: We evaluate the impact of climate-related events on the Brazilian banking sector. The analysis of physical risks reveals that, although short-run weather fluctuations and extreme events (droughts and floods) have limited impact on financial outcomes, climate change projections are expected to generate sizeable consequences to deposits and credit. We also document relevant geographical heterogeneity in the results and the importance of bank adaptation responses, avoiding areas with more considerable climate risks. The analysis of transition risks shows that the exposure of banks to green sectors concerning high impact sectors has a U-shape, growing since 2011.

Date: 2023-01
New Economics Papers: this item is included in nep-agr, nep-ban, nep-env and nep-fdg
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