Environment-related financial risks and regulatory capital requirements

The project focuses on green central bank policies, with a focus on green credit policy and regulatory capital frameworks. We shed light on the adoption of green policies by central banks as a means to mitigate the adverse effects of climate change. Our project develops general equilibrium models with incomplete markets, liquidity, collateral constraints and default that can be used for ex-ante evaluation of green climate policy and capture multiple channels of interaction. Our emphasis is on income and wealth inequality consequences of central bank green regulatory and monetary policy, and the importance of the rate of taxation to supplement the role of central banks.