Risks MDPI

European Non-Performing Exposures (NPEs) and Climate-Related Risks: Country Dimensions

🙌 #Publications2024 #ClimateRisk #NonPerformingExposures - 15 September ✔️ European Non‑Performing Exposures (NPEs) and Climate‑Related Risks: Country Dimensions ✍️ by Elisa Di Febo, Eliana Angelini and Tu Le Do climate risks really show up on bank balance sheets? This study analyzes the relationship between non‑performing exposures (NPEs) of European banking groups and climate risks across EU countries. Using OLS with time‑fixed and individual effects, it finds both physical and transition risks significantly worsen NPEs—while greater transparency and accountability (voice and accountability) unexpectedly increase reported NPEs, suggesting better recognition rather than deterioration. The findings position climate risk management as a critical challenge for European financial stability. 👉 https://brnw.ch/21x5GH5 #CreditRisk #TransitionRisk #PhysicalRisk #EuropeanBanking #FinancialStability #NPEs #ClimateFinance