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Is climate transition risk priced into corporate credit risk? : evidence from credit default swaps / by Andrea Ugolini, Juan C. Reboredo and Javier Ojea-Ferreiro.FB3-5/2023-38E-PDF

"We study whether the credit default swap (CDS) spreads of firms reflect the risk from climate transition. We first construct a climate transition risk (CTR) factor by using information on the vulnerability of a firm’s value to the transition to a low-carbon economy. We then document how this factor shifts the term structure of the CDS spreads of more vulnerable firms but not of less vulnerable firms. Considering the impact of different climate transition policies on the CTR factor, we find that these policies have asymmetric and significant economic impacts on the credit risk of more vulnerable firms, and negligible effects on other firms"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.927574&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitleIs climate transition risk priced into corporate credit risk? : evidence from credit default swaps / by Andrea Ugolini, Juan C. Reboredo and Javier Ojea-Ferreiro.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2023-38
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • "Last updated: July 17, 2023."
  • Includes bibliographical references (pages 21-23).
  • Includes abstract in French.
Publishing information
  • [Ottawa] : Bank of Canada = Banque du Canada, 2023.
  • ©2023
Author / Contributor
  • Ugolini, Andrea, author.
Description1 online resource (ii, 36 pages) : charts.
Catalogue number
  • FB3-5/2023-38E-PDF
Subject terms
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