ESG activity and bank lending during financial crises

IF 6.1 2区 经济学 Q1 BUSINESS, FINANCE
Gamze Ozturk Danisman , Amine Tarazi
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引用次数: 0

Abstract

This paper explores how banks’ environmental, social, and governance (ESG) activities affect their lending during financial crises. We use a sample of European listed banks with available ESG scores from 2002 to 2020 and consider the global financial crisis of 2007–2009 and the European sovereign debt crisis of 2010–2012. We estimate a two-step system GMM dynamic panel data model and also address potential endogeneity with instrumental variable (IV) and difference-in-difference (DiD) estimations. We find that lending falls to a lesser extent for banks with higher ESG scores during crisis times. Our findings are robust to using alternative ESG rating providers. An investigation of the different potential channels shows that, during crises, banks more engaged in ESG activities are less affected in terms of credit risk, asset risk, and profitability. They also face a lower reduction in market funding, allowing them to downsize to a lesser extent during crises, and their deposit rates do not increase as much as in less ESG-engaged banks. A deeper investigation reveals that our findings mainly hold for banks focused on traditional lending and deposit activities and are essentially driven by the environmental pillar component of ESG scores and the global financial crisis of 2007–2009.

ESG活动和金融危机期间的银行贷款
本文探讨了金融危机期间银行的环境、社会和治理(ESG)活动如何影响其贷款。我们选取了2002年至2020年具有可用ESG分数的欧洲上市银行样本,并考虑了2007-2009年的全球金融危机和2010-2012年的欧洲主权债务危机。我们估计了一个两步系统GMM动态面板数据模型,并通过工具变量(IV)和差中差(DiD)估计解决了潜在的内生性问题。我们发现,在危机时期,ESG得分较高的银行的贷款下降幅度较小。我们的研究结果对于使用其他ESG评级提供商是稳健的。对不同潜在渠道的调查表明,在危机期间,更多参与ESG活动的银行在信用风险、资产风险和盈利能力方面受到的影响较小。此外,它们面临的市场融资减少幅度较小,这使得它们在危机期间缩减规模的幅度较小,而且它们的存款利率增幅也不像较少参与esg的银行那么大。一项更深入的调查显示,我们的发现主要适用于专注于传统贷款和存款活动的银行,并且基本上是由ESG评分的环境支柱部分和2007-2009年的全球金融危机驱动的。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
7.70
自引率
9.30%
发文量
78
审稿时长
34 days
期刊介绍: The Journal of Financial Stability provides an international forum for rigorous theoretical and empirical macro and micro economic and financial analysis of the causes, management, resolution and preventions of financial crises, including banking, securities market, payments and currency crises. The primary focus is on applied research that would be useful in affecting public policy with respect to financial stability. Thus, the Journal seeks to promote interaction among researchers, policy-makers and practitioners to identify potential risks to financial stability and develop means for preventing, mitigating or managing these risks both within and across countries.
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