Cover IMF Working Papers
A Market for Brown Assets To Make Finance Green
Author:
Mr. Domenico Fanizza
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and
Laura Cerami
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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 011
Language:
English
Publication Date:
20 Jan 2023
DOI:
https://doi.org/10.5089/9798400231414.001
ISBN:
9798400231414
ISSN:
1018-5941
Pages:
20
Keywords:
Green finance; financial innovation; greenium; financial sector; climate change; market solution; experience of the secondary market; green transition; policy simulation; Climate finance; Nonperforming loans; Securities markets; Climate policy; Global; Europe
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This paper proposes a market solution to enhance the role of the financial sector in the green transition. Developing a secondary market for “brown exposures” can allow banks to dispose more quickly of stranded assets thereby increasing their capacity to finance green investments. Furthermore, newly created instruments – the brown assets backed securities (B-ABS) - can expand the diversification opportunities for specialized green investors and, thus, attract additional resources for new green investments. The experience of the secondary market for non-performing loans suggests that targeted policy and regulatory measures can simultaneously support the development of the secondary market for brown assets and green finance.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2023: Issue 011