Blog post by Paola D'Orazio, Lilit Popoyan, and Pierre Monnin
Originally posted on February 13, 2019
This blog post discusses how regulation can help bridge the climate gap between the current business as usual and the framework we need to be on a better long-term emissions path.
Some ideas proposed by the authors include targeting capital requirements, as well as requiring banks to build up a Carbon Countercylical Capital Buffer, or mandating that they "build up a capital buffer – i.e., a higher capital base – during periods of carbon-intensive credit growth at the aggregate level."