A Market for Brown Assets To Make Finance Green
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Summary:
This paper proposes a market solution to enhance the role of the financial sector in the green transition. Developing a secondary market for “brown exposures” can allow banks to dispose more quickly of stranded assets thereby increasing their capacity to finance green investments. Furthermore, newly created instruments – the brown assets backed securities (B-ABS) - can expand the diversification opportunities for specialized green investors and, thus, attract additional resources for new green investments. The experience of the secondary market for non-performing loans suggests that targeted policy and regulatory measures can simultaneously support the development of the secondary market for brown assets and green finance.
Series:
Working Paper No. 2023/011
Subject:
Climate change Climate finance Climate policy Environment Financial institutions Financial markets Nonperforming loans Securities markets
Frequency:
regular
English
Publication Date:
January 20, 2023
ISBN/ISSN:
9798400231414/1018-5941
Stock No:
WPIEA2023011
Pages:
20
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