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With ageing parents, kids and jobs, life for the ‘sandwich generation’ is no picnic.

An article in the Sydney Morning Herald, about the "Sandwich Generation", quoting Dr Michelle O'Shea.

Climate risk and bank stability: International evidence

An article by Anh-Tuan Le and Thao Phuong Tran (UEH-ISB) and Anil V. Mishra (WSU-SoB) was published in the Journal of Multinational Financial Management, a Q1 publication in Finance in 2023.

The paper studies the association between climate risk and bank stability. Using an international sample of 6433 commercial banks in 109 countries between 2005 and 2019, we illustrate that increased climate risk leads to decreased bank stability. These findings are robust to alternative bank stability measures and after controlling for endogeneity by an instrumental variable and system GMM approach.

Further analysis shows that the negative impact of climate risk on bank stability is more pronounced in small banks and banks that have low capital. In addition, we also find better institutional governance, bank supervision, and regulations can eliminate the adverse impact of climate risk.

Our results are neither determined by the effect of the financial crisis nor by the heterogeneity of different regions. Overall, our findings add a novel determinant of bank stability globally.

Link to article (opens in a new window)

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