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Ron Michener takes issue with my approach to and analysis of colonial Virginia's paper money. He objects to how I calculate the paper money's asset present value when the paper money is hypothesized to be zero-coupon and interest-bearing bonds. He questions my data on the amount of Virginia's paper money in circulation, and he objects to the econometric treatment I apply to my model of that money's performance. He, however, presents no alternative data constructions, or any alternative explanations for the patterns in the data, nor does he present any alternative hypotheses or do any hypothesis testing to account for the level and movement in the value of Virginia's paper money. [ABSTRACT FROM AUTHOR]

Farley Grubb's recent article in the Financial History Review contains econometric results designed to support his theoretical propositions concerning the paper money of the American colonies. This comment demonstrates that some of his results are spurious and the rest are based on using incorrect testing procedures and incorrect critical values of test statistics. [ABSTRACT FROM AUTHOR]

Green bonds, a new green financial instrument, encourage enterprises to achieve high-quality development through green technology innovation. However, a lack of research is currently being conducted into the effect of green bond issuance in China. Can green bonds effectively empower enterprises to green innovation? What is the underlying mechanism? In the context of carbon-neutral strategies, it is significant to answer these questions scientifically. This paper uses a quasi-natural experiment of the launch of the green bond market in China in 2016 to conduct empirical studies based on the panel data of 1 558 non-financial Chinese-listed enterprises from 2015 to 2020 with the multi-period difference-in-difference model. The results show that ① issuing green bonds can significantly empower enterprises' green technology innovation. The empowering effect is mainly for green utility patents rather than green invention patents. This result remains after dynamic heterogeneity analysis, placebo test, and other tests. In addition, the effect has a lag. ② Heterogeneity tests show that this empowerment effect varies across enterprises with different property rights, industries, and regions. ③ In terms of the mechanism of action, green bonds can enhance enterprises' ability to innovate green technology by increasing the proportion of long-term loans and improving their debt structure. This paper broadens the relevant literature on the economic consequences of green bonds and the influencing factors of enterprises' green technology innovation and provides policy suggestions for further improving the analysis of green bonds. [ABSTRACT FROM AUTHOR]

Following the pandemic, the EU has responded to the threat of a euro crisis flare-up by deactivating its fiscal framework and establishing the Recovery and Resilience Facility, drawing on joint European bonds to finance national investments. This paper seeks to explain these modifications to fiscal governance and asks whether they are an indication of European austerity making way for an alternative fiscal paradigm. Based on a neo-Gramscian approach, it discusses the policies as parts of competing political projects that are promoted or hindered by certain framework conditions. The paper undertakes a structured comparison of these framework conditions during the euro crisis and the current crisis. It finds that geoeconomic competition increases the demand for a more active fiscal policy, while political preferences and structural relations remained remarkably stable. As the current crisis is marked by high inflation, economic conditions are adverse to a fiscally expansive agenda. The findings do not suggest a lasting reorientation of European fiscal governance. Instead, the measures taken during the pandemic are interpreted as expressions of 'passive revolution' in which the EMU adapts elements of a fiscal integrative agenda to provide necessary fixes to its economic order while keeping its underlying fiscally restrictive features intact. [ABSTRACT FROM AUTHOR]

This paper draws on the hands-on experience of HSBC in implementing distributed ledger technology (DLT)-based solutions through building its own proprietary tokenisation platform, HSBC Orion, and participating in various industry initiatives such the Hong Kong Monetary Authority (HKMA)'s inaugural tokenised green bond issuance. The paper highlights key considerations for building DLT-based solutions and provides a view of the future state of digital assets as the ecosystem continues to grow and evolve. [ABSTRACT FROM AUTHOR]

This paper studies the issuing pricing character of green bonds with the evidence from China and further analyzes the reason why green factor affects bond issuing pricing by analyzing credit rating's intermediary effect and exploring the mediating of policy incentives and third-party green certification. Furthermore, heterogeneity analysis is conducted to analyze how green factor impacts on bond issuing pricing at different quantiles and for companies in different industries or with different ownership. The findings include: (1) Green factor generally reduces the issuance interest rate of green bonds, though this effect is not significant at the low quantiles or at the early development stage. (2) Green factor's impact on bond issuing pricing occurs partly by improving bond credit rating, fully by this way for companies in the construction industry, but directly for companies in other industries. (3) For non-state-owned companies, green factor has direct effect on bond issuing pricing, but this effect is not significant for state-owned companies. (4) Third-party green certification and incentive policies enhance the reducing effect of green factor on the issuance interest rate. This study provides a theoretical reference for environment-friendly investors, financiers with green projects and the regulators caring about green finance. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to explore the quantile-specific short- and long-term effects of economic policy uncertainty (EPU) on the efficiency of the green bond market. Design/methodology/approach: This study examines the long-term cointegration relationship and the short-term fluctuation relationship of EPU, WTI crude oil price (WTI) and European Union Allowances price (EUA) with the green bond market efficiency (GBE) using the quantile autoregressive distributed lag method. Additionally, the authors analyze the differences before and after the Covid-19 pandemic. Findings: EPU has a significant positive impact on the GBE before the outbreak. However, during the crisis period, the impact of EPU and WTI was greatly weakened, whereas the impact of EUA was strengthened. Practical implications: This paper demonstrates the dynamics of GBE and its influencing factors under different periods. The findings provide insights for market participants and policymakers to gain a clearer understanding of the green bond market. Originality/value: This paper extends the study of green bonds by quantifying the GBE and elucidating the nonlinear relationship between efficiency and independent variables at different quantiles over different periods. [ABSTRACT FROM AUTHOR]

As the green bond market expands, an increasing number of Green Bond External Reviewers (hereafter 'GBER' or 'GBERs') have gained momentum among investors and financial regulators. A GBER enhances the credibility of green bonds and prevents greenwashing risk in the green bond market by reducing the information asymmetry between issuers and investors. China is the second largest issuer of green bonds in the world. The current Chinese GBER legal framework is insufficient to ensure green bond market sustainability. Our purpose in this paper is to analyze the inadequacies of the Chinese GBER regulatory framework and to provide suggestions for overcoming the potential challenges within it. A textual analysis of primary legal sources and secondary academic sources serves as the main research methodology in this study. This paper provides an in-depth analysis of China's GBER regulatory framework and addresses its shortcomings and weaknesses. Furthermore, given the evolving stage of the Chinese green bond market, this paper analyzes potential challenges for GBERs and proposes some suggestions to ensure high-quality reviews by GBERs. [ABSTRACT FROM AUTHOR]

The research literature has many examples of attempts to classify bond issuers into agency rating categories and to identify the key variables that contribute to bond rating differences. This study extends the classification literature to include public utility commercial paper issuers. [ABSTRACT FROM AUTHOR]

This paper utilizes a climate justice perspective to examine municipal green bonds (MGBs), a green-labelled debt instrument issued by subnational governmental entities, such as municipalities or cities, that determines financial, social and environmental redistributions in the context of climate change. This analysis focuses on the origins and financial construction of MGBs as the "descendant" of US municipal bonds and provides data on their recent diffusion in Africa and Latin America. It then draws connections with the lessons learned from critical analyses of US municipal bonds. The case study section explores one wastewater MGB of San Francisco (California) and creates material and theoretical connections with MGBs issued to finance water infrastructure in Mexico City (Mexico) and Cape Town (South Africa). The article concludes that the analysis and implementation of municipal green bonds needs a climate justice approach in order to recognize and address the production and reproduction of climate injustices. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the relationship between sustainable investments and a series of uncertainties from January 2014 to December 2021, including many economic and political turbulences and the COVID-19 pandemic. Design/methodology/approach: The authors use Rényi's transfer entropy method, a nonparametric flexible tool that considers both the center distribution and lower quantiles, capturing extreme rare events that give additional insights to analysis. Findings: The authors' results indicate significant bidirectional information transmissions between the crude oil volatility and sustainability indices. The authors report information flows between the cryptocurrency uncertainty and sustainability indices considering tail events. The results are essential for market participants making decisions during turbulent times. Originality/value: This paper is carried out for a variety of uncertainty measures and environmental, social and governance (ESG) portfolios of both developed and developing markets. It adds to literature in terms of methodology used. Rényi's transfer entropy methodology is first used to measure the relationship between uncertainties and ESG investments. [ABSTRACT FROM AUTHOR]

The imperative to achieve sustainable development in the face of accelerating urbanization has prompted an urgent re-evaluation of the role that municipalities play in driving environmentally conscious growth. This research paper delves into the critical nexus between municipalities and sustainable development in India, with a specific focus on the innovative financial instrument of green bonds. The study employs a comprehensive review of utility of Green Bonds in India and Internationally. Through this methodology, the paper seeks to shed light on the efficacy of green bonds in augmenting municipal initiatives towards sustainable urbanization. The findings of this research provide nuanced insights into the multifaceted roles that municipalities undertake in advancing sustainable development agendas. By analyzing the implementation of green bonds by municipalities in India and International countries, the paper discerns trends in the utilization of green finance for eco-centric urban projects. Moreover, it scrutinizes the influence of green bond proceeds on key sustainability indicators, such as reduction of greenhouse gas emissions, improved waste management, and enhanced green infrastructure. It also examines potential policy recommendations to overcome these impediments, thereby providing a roadmap for municipalities to more effectively leverage green bonds as a financial tool for sustainable urban development. In conclusion, this research contributes a comprehensive understanding of the pivotal role that municipalities play in advancing sustainable development and underscores the potential of green bonds as a transformative financial instrument in this endeavor. By providing review based in-depth research and practical insights, this paper offers valuable guidance for policymakers, urban planners, and financial institutions seeking to accelerate the transition towards more environmentally sustainable and resilient cities in India. [ABSTRACT FROM AUTHOR]

The green bond market has significantly improved in recent years thanks to the development of financial instruments and the rising climate change concerns. Given this backdrop, this paper investigates the effects of returns in different financial markets, i.e. the United States Treasury Bonds, the Standard & Poor's stock market, the United States Dollar, Gold, Crude Oil, and Bitcoin on the Green Bond returns (the Standard & Poor's Green Bond Index) from September 17, 2014, to September 1, 2022. The results from the robust linear and machine learning estimators indicate that the returns of the United States Treasury Bonds and the United States Dollar are negatively related to the Green Bond returns. Meanwhile, Gold returns positively affect Green Bond returns. The quantile regression estimations of Machado–Santos Silva also show that these findings are valid in different quantiles. The paper also discusses policy implications related to climate change and the development of financial instruments to promote green investments. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of bond issuance in the Chinese market and the influence of capital structure—in particular direct debt finance—on firm performance and the cost of debt. The results reveal that institutional factors in the Chinese market, in particular the involvement of the financial authority permission process during bond issuance, enhance the credibility of firms that are able to successfully issue bonds. Empirical analysis of Chinese listed manufacturing firms over the period from 2010 to 2021 demonstrates that firms with higher outstanding levels of bonds perform better and face lower costs of both bond and nonbond direct finance. We interpret this as bond issuance approval serving as a signal to markets of an implicit government guarantee on firms that are approved to issue bonds. The agency problem is analyzed using propensity-score matching and Logit analysis, revealing a trade-off between the principal–agent conflict and conflicts of interest among different shareholders when power is very concentrated through CEO duality: the CEO simultaneously serves as the chairman of the board. In large firms, as measured by total assets, the cost-reducing effect of the principal–agent problem being mitigated by CEO duality outweighs the agency costs arising from conflicts of interest between large and small shareholders, leading to an increased likelihood of successful bond issuance. However, in large firms, as measured by market capitalization, where share ownership is likely more diversified, this effect diminishes. In conclusion, this paper posits that policymakers ought to investigate strategies for granting preferential treatment to high-growth, small to mid-sized enterprises, enabling them to secure funding through direct debt financing. [ABSTRACT FROM AUTHOR]

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This paper proposes an aggregation scheme of subjective bond return expectations based on the historical accuracy of professional interest rate forecasters. We use disaggregated survey data on bond returns and document large disagreement in the cross-sectional distribution and persistence in forecast accuracy. Our aggregate subjective belief proxy outperforms equal weighting schemes, and its dynamics are significantly different from statistical forecasting models. With this measure in hand, we study the relationship between quantities of risk and subjective expectations of excess returns and demonstrate a strong link between the two, even if such a relationship is difficult to detect using realized returns. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Purpose: The aim of this paper is to analyze the importance of finance for climate change. Design/methodology/approach: The paper attempts to answer the question: what is the meaning of finance in the processes related to environmental protection, what is the development trend in the field of the so-called instruments of green finance and what are the purposes of the particular instruments. The following research methods were used: literature review, desk research (UNCTAD reports, GIIN, Sustainable Debt, Green Finance in Poland,) and deductive reasoning. Findings: The market for green finance instruments is growing rapidly. For both green bonds and sustainable funds and impact investments, the growth rate in the number and value of instruments has been the highest in recent years. The analysis of investment directions indicates that they are related to activities concerning environmental protection or other aspects of sustainable development. Practical implications: The importance and need for creating conditions (legislative, technical, educational) for the development of green finance instrument market was indicated. Originality/value: The paper offers cognitive value as it contributes to the body of knowledge regarding the relevance of green in addressing climate change. [ABSTRACT FROM AUTHOR]

Evidence suggests that sovereign debt markets are not featured by perfect competition but power dynamics are a key determinant of market outcomes such as ex-post returns on sovereign bonds. In such environment, coordination within each side of the market matters. With the purpose of influencing the international debt architecture, private creditors have historically been fairly coordinated and their interests more aligned ex-ante. Sovereign debtors, however, have not. The power asymmetry that that entails has equity and efficiency implications, both ex-ante and ex-post. This paper analyzes asymmetries in collective action of each side of the sovereign debt market and the mechanisms through which it affects market outcomes. It also analyses the Cartagena Group's experience in the 1980s as a prominent historical case of greater borrower coordination and identifies mechanisms through which greater debtor coordination could be fostered. [ABSTRACT FROM AUTHOR]

For many countries, the systemic risk of local government debt is a matter of concern, but at present, there is little analysis in this area. The complex network based on information analysis provides an effective tool for analyzing the system risk between networks. This paper takes China as an example and takes the provincial urban investment bonds as the object for research. The regional network constructed with the interest rate data of urban investment bonds represents the overall systemic risk of these bonds. The main conclusions are as follows: provincial nodes in western and central areas (underdeveloped areas) are more important in the system, and they are more easier to form debt defaults. For an interconnected urban investment bond network, the higher the default risk of an individual, the greater the risk of the entire system. Finally, based on the indicators obtained from the provincial urban investment bond network model, this paper puts forward policy suggestions for the prevention of urban investment bond risks. [ABSTRACT FROM AUTHOR]

This paper aims to effectively reduce CO2 emissions by examining the impact of three distinct incentive and constraint policies on the quality of rating and certification information in China's green bond issuance market. To accomplish this, the government has implemented incentives, while regulators have introduced constraints to curb the spread of inflated rating and certification information. We build on the integrated rating and certification regulation mechanism by presenting a two-stage Stackelberg game model that involves four key participants: the China Securities Regulatory Commission, local governments, green evaluation and certification agencies, and credit rating agencies. We incorporate environmental effects indicators into the expected utility of rating and certification agencies to investigate the equilibrium conditions under three policy scenarios: a single financial incentive policy, a single regulatory constraint policy, and a combined incentive and constraint policy. The paper employs Stackelberg game theory to analyze how different policies mitigate the occurrence of "inflated" ratings and "greenwashing" in certifications. Numerical analysis is conducted to validate the theoretical findings. Moreover, we assess the impact of these policies on the quality of rating and evaluation information, using data from China's green bond issuance market between 2016 and 2021. Our research offers valuable management insights and regulatory recommendations for both regulators and local governments. [ABSTRACT FROM AUTHOR]

This paper analyzes the relation between country-specific high-frequency activity indicators and bond holdings in the portfolio of global investors. Based on positions from more than 20,000 investment funds, it finds that bond flows are significantly impacted by high-frequency activity levels and policy rates in emerging markets. Local "pull factors" have become important drivers of bond purchases. This effect of activity data—as captured by the Purchasing Managers' Indices (PMIs)—is stronger in the cases of India, China, Brazil and Indonesia as bond purchases in these markets appear to respond more to changes in activity survey responses. Overall, standardized coefficients indicate that an increase in a country's PMI reading has an effect on bond purchases that is on average as large as that of a decrease in a global risk metric or a reduction in US Treasury yields. That said, during episodes of bond outflows global factors dominate. [ABSTRACT FROM AUTHOR]

This paper explores the issuance and growth of transition and sustainabilitylinked bonds into the green market segment normally reserved for green bonds between 2018 and 2021. Using a performative economics and STS approach we examine how key terms within environmental political discourse - transition, green, sustainability - have been incorporated into the operation of investment markets, and given specific, if unstable and contested, technico-economic forms. Using event ethnography, industry literature and primary interviews, we examine how classification works as a market device, by exploring why the newer 'transition bond' was favoured by some investors but not others in comparison to green and sustainability bonds. We argue that the credibility of different green labelled products is being mediated by uneven references to scientific evidence, in the context of competing marketization strategies, which have world-making effects. [ABSTRACT FROM AUTHOR]

The paper presents the blue economy development in The Bahamas with an analysis of the conditions for using blue bonds as a financing mechanism. As part of the activities to be pursued for the issuance of a blue bond, the paper provides an identification of investment projects that could be financed through blue bonds. In addition to its blue economy activities, the government seeks to enhance the coastal ecosystems' resilience and their capacity to reduce the effects of strong climatic events following the Dorian Hurricane in September 2019. In this context, investments in the protection and restoration of ecosystems that increase public goods are therefore needed, especially in the context of the 30 × 30 target. The paper furthermore highlights the key challenges The Bahamas is facing for the development of suitable blue financial mechanisms, including the need for a robust institutional framework to ensure an efficient implementation of a blue financing scheme. By explicitly reflecting on the challenges for a country like the Bahamas, the paper seeks to provide a realistic account of the role and potential of bonds for financing sustainable development in marine environments. [ABSTRACT FROM AUTHOR]

The current study explores the problem of illiquidity in the corporate bond market globally and proposes a solution to enhance liquidity by studying various dimensions of liquidity. Purpose: The purpose of this paper is to propose a solution to the global issue of illiquidity in the corporate bond market. The problem has been identified by many researchers and this paper attempts to find a viable solution in the "fungibility route" as an alternative to the "liquidity route". Design/Methodology: An analysis of a sample size of 234,772 trade data of corporate bonds and a sample size of 2,00,607 trade data of G-securities is performed to identify the problem. Findings/Solution proposed: A mathematical model based on the credit risk differential and sensitivity differential is proposed to find out the fair value at which an illiquid bond can be exchanged with a liquid bond. To arrive at the fair value of the illiquid bond, we have calculated the risk-adjusted yield (RAY) using the modified duration and a credit risk differential. Originality: This research is a pioneering effort in addressing the worldwide issue of corporate bond illiquidity by proposing a novel solution. The proposed strategy aims to improve the liquidity of the bond indirectly, by utilizing the fungibility route. [ABSTRACT FROM AUTHOR]

Using Renminbi (RMB) bonds, especially Chinese Government bonds (CGB), as collateral for both onshore and cross-border over-the-counter (OTC) derivatives is a hot topic following China switching to a netting jurisdiction in August 2022. Since then, Chinese financial institutions are required to exchange initial margin and variation margin with offshore counterparties for dealing cross-border derivatives. As the market infrastructure for using RMB bonds as collateral for cross-border OTC derivatives transactions is not well established and RMB bonds are not extensively accepted by foreign counterparties as eligible collateral, Chinese financial institutions are unable to utilise their huge RMB bond holdings. At the same time, many foreign investors are allowed to access China's onshore RMB bond market with RMB bond holding up to RMB 3.4tr, but are unable to use those inventories as collateral for their onshore and cross-border derivatives trading and other financial transactions. Using RMB bonds as collateral is also an initiative of RMB internationalisation. The purpose of this paper is to give an extensive explanation of the status of using RMB bonds as collateral in the Chinese market, point out challenges faced by market participants and provide suggestions to promote using RMB bonds as collateral for both onshore and cross-border derivatives transactions. This paper provides the full picture of China's onshore RMB bond investment and bond collateral management along with the latest data. It also provides extensive analysis for deficiencies in respect of the RMB bond collateralisation. It concludes with suggestions for the future development of the Chinese market to use RMB bonds as collateral for both onshore and cross-border OTC derivatives. [ABSTRACT FROM AUTHOR]

There have been several studies reported in the literature dealing with the valuation and the determinants of the premium on convertible bonds, see [1,2,3,5]. The phenomenon of liquidation of the convertible bonds seems to have received relatively scant attention and the theorists and practitioners alike are hard pressed to find cogent rationale for the voluntary conversion of convertible bonds. Once the share price exceeds the conversion price the holder of the convertible bond faces the decision either to convert it into shares or hold on to it until a later date. The paper by Mehta attempts to offer a rationale for this voluntary conversion of the convertible bonds taking place gradually over a period of time. He provides empirical data to indicate that voluntary conversion of convertible bonds does take place in the market and that it is gradual over time. After analyzing a number of possible reasons for voluntary conversion of the convertible bonds the author concludes that because of uncertain growth in share prices, the (convertible bond) CB holders hedge their position by selling the call option and where the price subsequently goes up they close their position by converting the CB assuming that this would be cheaper than the alternative of selling the CB and buying the shares in the market with the associated transaction costs and tax considerations taken into account. The paper rules out other motives of CB conversion such as the interest/dividend differential on the CB and its underlying equity on the grounds that it would be inconsistent with the gradual voluntary conversion of the CBs over time. The paper argues that voluntary conversion of CB can best be explained in terms of market imperfections and two of these imperfections considered by the author are taxes and transaction costs. [ABSTRACT FROM AUTHOR]

Most empirical studies show that three factors are sufficient to explain all the relevant uncertainties inherent in option prices. In this paper, we consider a three-factor CIR model exhibiting unspanned stochastic volatility (USV), which means that it is impossible to fully hedge volatility risk with portfolios of bonds or swaps. The incompleteness of bond markets is necessary for the existence of USV. Restrictions on the model parameters are needed for incompleteness. We provide necessary and sufficient conditions for a three-factor CIR model that generates incomplete bond markets. Bond prices are exponential affine functions of only the two term-structure factors, independent of the unspanned factor. With our three-factor CIR model exhibiting USV, we derive the dynamic form of bond futures prices. By introducing the exponential solution of a transform and using the Fourier inversion theorem, we obtain a closed-form solution for the European zero-coupon option prices. The pricing method is efficient for taking into account the existence of unspanned stochastic volatility. [ABSTRACT FROM AUTHOR]

This paper studies the senior unsecured bondholders' bail-in expectations and market monitoring following bail-in legislative events aimed at introducing new tools for subordination. We measure bail-in expectations using a difference in differences approach that compares the reaction to bail-in events of senior unsecured bonds to the reaction of non-bailinable bonds. Similarly, we measure senior unsecured bondholders' monitoring activity by using a triple differencing analysis that compares the yield-risk sensitivity reaction of senior unsecured bonds with respect to that of non-bailinable bonds. Our results indicate unaffected bail-in expectations by senior unsecured bondholders who, accordingly, do not enhance their pricing of banks' risk. [ABSTRACT FROM AUTHOR]

Public sector corruption affects economic and financial outcomes, such as GDP growth, foreign direct investment, and government funding costs. Less is known about the spillovers from perceptions of public sector corruption on the private sector corporate bond market. In this paper, we assess the role of public sector corruption perception on corporate bond market variables in Europe using data of both country-level corporate bond indexes and firm-level corporate bond market issuances. At the aggregate country level, we find some evidence that country indices of corporate bonds' yields and coupons are higher in countries with more corruption. While we do not find effects of corruption on coupon rates at the individual firm level, we show that higher government corruption perception increases their yield to maturity and reduces the amounts raised by corporations through their bond issuances. [ABSTRACT FROM AUTHOR]

Africa is one of the most vulnerable continents to climate change. Climate and sustainability-linked bonds can provide funding to African governments and corporations for projects that help to mitigate climate change, combat biodiversity loss, and foster sustainable development. However, less than 0.3% of the global environmental, social, governance (ESG) bond issuance volume is devoted to projects in Africa. Based on the entire universe of 107 African ESG bonds from 42 governmental and corporate issuers over the period 2010–2023, this paper establishes that ESG bonds provide benefits to both issuers and investors in terms of lower spreads and volatility. Our econometric results highlight that greenwashing is a valid concern for investors in African ESG bonds and certification of ESG bonds makes a difference vis-à-vis the self-labeling of green bonds. Non-certified ESG bonds do not offer similar benefits compared to certified ones. Green macro-financial policy and suitable regulation to prevent greenwashing can foster African ESG-bond markets. [ABSTRACT FROM AUTHOR]

The article discusses the implications of investment bank recommendations on the allocation of portfolio comprising the bond market in emerging countries. It states that a database was established which focuses on the recommendations of 10 investment banks from 1997-2006, where these banks dominate the emerging bond market during the period. It reveals that 90 percent of underwriters suggests to retain in their portfolios the bonds issued by other countries. Meanwhile, investment banks' recommendations are based on the size of the secondary market. In addition, data from the panel analysis conducted shows that investment banks' recommendations play a significant role in evaluating capital movements in developing countries from among other macroeconomic indicators.

The size of green bond market has been increasing rapidly since the Paris Agreement on climate change was adopted in 2015. This paper is an empirical study on the public companies that have financed greenfield projects through green bonds. The study is based on equity investor behavior following the news announcement of green bonds. An event study approach is applied to find out the impact on abnormal returns of stocks during the window period of the announcement day. The study supports that stock return behavior is positive, which is an indication that investors responded positively to the announcement of green bonds. Leverage analysis is also performed, and it is found that the financial leverage increased in the post-issue period of green bonds. It is an indication that the use of low-cost security in financing the greenfield projects is capable of maximizing shareholder returns, if the return on investment is more than the cost of green bonds. This paper adds to the existing literature as it focuses on the stock performance of public companies around green bond issuance announcement. Further, the analysis of financial leverage of the firms distinguishes this study from others. [ABSTRACT FROM AUTHOR]

The discussion on the necessity of a larger volume of very highly quality liquid assets (VHQLA) in the euro area has been very extensive. The debate on expanding the pool of comparable euro area assets focuses on "safe assets", often on various combinations of government bonds, most of which would not entail a strong increase in euro VHQLA. This paper explores a different option, complementary to the existing ones, based on the creation of a safe European asset backed by fully private assets. The paper proposes the issuance of supra-covered bonds by a central European institution. The latter are bonds issued by the central issuer and backed by covered bonds, which banks would have created using their mortgages as their cover pool. The aim is to increase substantially the outstanding amount of euro VHQLA. Such an asset would also be very beneficial during crisis periods, such as the current COVID19 crisis, by allowing banks to transform mortgages into very high quality liquid assets that can be used for funding and as a collateral in operations with the Eurosystem, thus enhancing the possible credit to sustain small and medium-sized enterprises (SMEs). This paper assesses the main effects of such a proposal on banks under different possible scenarios. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the impacts of green bond issuance on the environment while taking into account the moderating role of issuing countries' institutional quality. Design/methodology/approach: The analysis is based on a longitudinal data set covering 171 countries and territories during 2007–2018. The authors rigorously account for endogeneity issues using two-stage least squares estimation and a set of instrumental variables for green bond issuance volume. Findings: The overall results confirm the positive environmental impacts of green bonds in reducing carbon dioxide and greenhouse gas emissions, enhancing renewable energy consumption rate and accelerating the progress towards sustainable development goals (SDGs). However, these effects are contingent upon the levels of institutional development of the issuing countries in a way that green bond issuance only benefits the environment when the institutional quality has reached a minimum level. Practical implications: The results provide important policy implications for countries in their efforts to prevent environmental degradation and achieve SDGs. Originality/value: This paper contributes to the existing literature by providing a macro-level evaluation of the environmental impact of green bonds, hence, enabling policy implications to be drawn for countries to achieve their SDGs. The analysis is more comprehensive using a wide range of indicators for environmental performance. To the best of the authors' knowledge, this paper is also one of the first attempts to examine the moderating effect of institutions on the environmental impact of green bonds. [ABSTRACT FROM AUTHOR]

In this paper, we provide new evidence on how political uncertainty influences bond default, using China's local officials' turnover as a source of plausibly exogenous variation in uncertainty. We find that officials' turnover increases bond defaults when political links are stronger, indicating that political turnover can destabilize government support for politically connected bonds. Additionally, off-budget resources have expanded China's local government's ability to bail out local bonds. Further results show that political connections create zombie bonds that ought to be out but instead to be in the market, reducing the allocative efficiency of financial resources. Our study suggests that, at least in some countries, political uncertainty influences financial risk through the mechanism of political connection. [ABSTRACT FROM AUTHOR]