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Using a sample of East Asian banks covering the period 1999–2014, this paper analyses the impact of natural disasters on commercial bank performance and how financial integration moderates this relationship. A dynamic GMM model reveals that natural disasters significantly lower deposit ratios but have no contemporaneous relationship with liquidity, credit risk, profitability and default risk. There is also evidence of a lagged effect of disasters, increasing deposits and lowering liquidity one year after the event. Furthermore, foreign banking claims, specifically those extended by regional Asian lenders, help to alleviate the deposits decline in the aftermath of natural disasters. These baseline findings are mainly driven by severely affected countries. Overall, the paper highlights the role of commercial bank deposits and foreign banking claims as sources of finance for post-disaster recovery. In particular, the resilience of Asian foreign claims in the event of natural disasters provides evidence to support intra-regional financial integration in East Asia. [ABSTRACT FROM AUTHOR]

We examine climate transition risk in New Zealand (NZ) equities given that NZ's greenhouse gas (GHG) emissions are dominated by agricultural emissions and that carbon pricing has been in place since 2008. We find disclosure has grown rapidly from 2010 and that disclosure is driven by, inter alia, size and sector membership (Energy, Manufacturing and Primary Industries). However, by 2018, only around half of NZX50 companies regularly disclose emissions, though this should increase steadily as NZ will adopt mandatory disclosures from 2023 onwards on a 'report or explain basis'. In terms of 'hypothetical carbon liabilities', Genesis Energy and Air New Zealand are most exposed for Scope 1 and 2 emissions, but when upstream scope 3 GHG emissions are added, Fonterra (multinational dairy firm) is most at-risk. An asset pricing analysis shows that only volatility and extreme price movements in carbon price returns are priced. Overall, the results suggest that despite there being material climate transition risks for NZX50 equities, limited disclosure and low carbon prices mean that these risks are not likely to be fully priced in stock values. [ABSTRACT FROM AUTHOR]

Financing climate change mitigation and adaptation in Asia is critical for its population and economies but also for those of the world. This editorial provides a commentary and overview of ten articles within this special issue of Climate Policy on 'Green Finance in Asia'. Contributions are diverse in terms of focus and methods. Most of the articles focus on managing transition risk with six of the articles having an energy focus; the dominant themes are the risk of stranded coal assets in China; the role of export finance by China and Japan for fossil fuel-fired power generation assets within Asia; and investment in renewable power generation and the policies to support such investment. The remaining four articles explore various policies in specific country contexts: the effects of green bond policies in China; the greening of monetary policy in China; the governance of sustainable finance in Indonesia; and policies to support investment and finance of off-grid electricity access in Bangladesh. Most of the ten contributions come from researchers in developed countries and principally from non-Asian countries, suggesting there is a need to develop green finance research capability and capacity across Asia. Despite being withing scope of the special issue, this collection does not contain papers on physical risk or adaptation finance. We highlight these as important gaps and priorities for future research. Key policy insights This editorial provides a commentary and overview of ten articles within this special issue of Climate Policy on 'Green Finance in Asia'. Most of the ten contributions come from researchers in developed countries and principally from non-Asian countries. There is a need to develop green finance research capability and capacity across Asia. Most contributions were focussed on transition risk, with limited or no focus on physical risk and adaptation finance. This likely reflects the multiple resource and expertise challenges faced when conducting physical risks assessments. [ABSTRACT FROM AUTHOR]

The European Union's (EU) energy sector is changing due to major policy reforms. In this article, we examine the impact of major legislative changes which were designed to induce competition in the energy sector: the three liberalization packages. Competition was expected to benefit the industry by phasing out inefficient firms. EU citizens were also expected to benefit as competition was likely to promote a more efficient energy sector and more consumer choice of energy products and services. However, this legislative change occurred during a period of extreme market turmoil. We examine the impact of all these changes on the risk profile of the sector. Our results show that the liberalization legislation significantly increased systematic risk exposure of the sector, reducing its role as a defensive investment asset. We also show that commodities had relatively little impact on sector returns, but this was expected as utilities can offset commodity risk in hedging markets. We compare our results to those obtained in neighbouring EU sectors and find the impacts are isolated to the energy sector. This article makes a major contribution to energy policy by empirically showing the change in risk as a result of sector liberalization. [ABSTRACT FROM AUTHOR]