Environmental, Social, and Governance (ESG) Scores in the Service of Financial Stability for the European Banking System
The financial stability of the banking system depends mainly on the resilience of the banking system, which can be estimated with traditional variables like the ratio of non-performing loans, capital adequacy ratios, and other balance-sheet-related approaches that represent robustness (like ROA). Th...
Elmentve itt :
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| Dokumentumtípus: | Könyv része |
| Megjelent: |
Budapesti Corvinus Egyetem
Budapest
2021
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| Sorozat: | Green Financial Perspectives - Proceeds of the Central European Scientific Conference on Green Finance and Sustainable Development, October 2020
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| Tárgyszavak: | |
| mtmt: | 32129176 |
| Online Access: | http://publicatio.bibl.u-szeged.hu/22070 |
| Tartalmi kivonat: | The financial stability of the banking system depends mainly on the resilience of the banking system, which can be estimated with traditional variables like the ratio of non-performing loans, capital adequacy ratios, and other balance-sheet-related approaches that represent robustness (like ROA). This paper aims to test how the capital adequacy ratio can be estimated better with the implementation of different ESG scores (total and environmental only). Since the ESG score can be an appropriate proxy variable for capturing the non-financial ‘soft skills’ of a bank, it can be used to approximate the ethical standards of a bank in the long run. This paper uses an annual set of 247 banks from the European Economic Area between 2002 and 2018 (source of data: Refinitiv database) to test our theoretical model, employing a standard unbalanced panel and a quantile panel regression in Eviews. The latter approach provides better insight into the assumed differences between banks with high and low capital adequacy ratios. Our results support the hypothesis that the ESG score could be useful for capturing a specific, financially more resilient market segment. |
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| Terjedelem/Fizikai jellemzők: | 10 29-38 |
| ISBN: | 9789635038909 |