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Archive » June 2022 » The exposure of the Italian financial system to transition risk

The exposure of the Italian financial system to transition risk

Ivan Faiella, Luciano Lavecchia, Sara Pinoli
June 2022 - n. 6
Keywords: Climate change, financial stability, transition risk
Jel codes: Q54, G21, G28

In this paper we use data on the exposure of loans, bonds, equities and other securities referred to any non-financial firms and held by banks, insurances, Spvs and other financial intermediaries towards Italian (resident) non-financial firms. We identify those sectors deemed to be «carbon-critical», i.e. particularly exposed to transition risk and any asset associated with these sectors exposed to transition risk. We find that at the end of 2019, 12% of the financial assets of banks, financial intermediaries and Spvs are potentially exposed to transition risk.

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