Weak Transmission of Climate Policies and Macroeconomic Dominance in Bank Allocation: Empirical Analysis in the WAEMU Zone

Faible transmission des politiques climatiques et dominance macroéconomique dans l'allocation bancaire: Analyse empirique en zone UEMOA

Serigne Moussa Dia
Additional contact information
Serigne Moussa Dia: UADB - Université Alioune Diop de Bambey

Post-Print from HAL

Abstract: Abstract This article examines the transmission of climate policies to bank credit allocation in the WAEMU region between 2015 and 2024. The methodology employs a bank-country-quarter fixed effects panel model applied to a sample of 40 banks (n = 1,560 observations), adapting the approach of Covi et al. (2025). The empirical results reveal an almost non-existent transmission channel: the coefficient associated with the CCPI index is weak and statistically insignificant (β = 0.04; p > 0.10) for green exposures (TAC), as well as for carbon-intensive sectors (β = −0.02; p > 0.10). In contrast, inflation emerges as the main determinant: a one-point increase in the inflation rate leads to an estimated +3.5% reallocation toward more resilient sectors (β = 0.0014; p < 0.05), indicating macroeconomic dominance over climate signals. The findings highlight a substantial gap in the integration of climate risk within WAEMU banking practices. The average share of "green" loans remains below 2% of total portfolios, while exposure to vulnerable sectors still exceeds 28%. The study calls for strengthening the BCEAO's prudential framework: mandatory climate stress tests, standardized disclosure requirements, and targeted regulatory incentives. Keywords: Climate policies; Bank allocation; WAEMU; Transition risk; Green finance; Macroeconomic dominance. JEL Classification: G21, Q54, E58, O55 Paper type: Empirical research article

Keywords: Bank allocation; Macroeconomic dominance. JEL Classification: G21; Green finance; Transition risk; WAEMU; Politiques climatiques Allocation bancaire UEMOA Risque de transition Finance verte Dominance macroéconomique. Classification JEL : G21; O55 Climate policies; Dominance macroéconomique. Classification JEL : G21; Finance verte; Risque de transition; UEMOA; Allocation bancaire; Politiques climatiques; O55 Paper type: Empirical research; O55 Climate policies Bank allocation WAEMU Transition risk Green finance Macroeconomic dominance. JEL Classification: G21; E58; Q54 (search for similar items in EconPapers)
Date: 2025-12-15
Note: View the original document on HAL open archive server: https://hal.science/hal-05420001v1
References: Add references at CitEc
Citations:

Published in International Journal of Accounting, Finance, Auditing, Management and Economics, 2025, International Journal of Accounting, Finance, Auditing, Management and Economics - IJAFAME, 6 (Issue 13 (2025)), pp.2658-8455. ⟨10.5281/zenodo.17873597⟩

Downloads: (external link)
https://hal.science/hal-05420001v1/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05420001

DOI: 10.5281/zenodo.17873597

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().