Green financial sector initiatives, including financial policies, regulations, and instruments, could play an important role in the low-carbon transition by supporting countries in the implementation of economic policies aimed to decarbonize their economy. Thus, it is fundamental to understand...

The urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a...

The financial system could play a main role in achieving the global climate targets by aligning investment flows to sustainability. However, investors are still largely exposed to carbon-intensive assets that could become stranded. In addition, they are not pricing yet climate risks and...

Investments are largely allocated to sectors of economic activities that are at odds with the climate targets, thus exposing countries' economies and investors' portfolios to the risk of carbon stranded assets. In this context, a main knowledge gap is represented by the poor understanding of...

We introduce a general model for the balance-sheet consistent valuation of interbank claims within an interconnected financial system. Our model represents an extension of clearing models of interdependent liabilities to account for the presence of uncertainty on banks' external assets. At the...