The E-axes Forum on Climate Change, Macroeconomics, and Finance

Hyeyoon Jung, Michael Barnett

“U.S. Banks’ Exposures to Climate Transition Risks”

Young Scholars' Webinar on Climate Finance and Economics

From the Abstract: We find that banks’ credit exposures to transition risks are modest. We build on the estimated sectoral effects of climate transition policies from general equilibrium models. Even when we consider the strictest policies or the most adverse scenarios, exposures do not exceed 14 percent of banks’ loan portfolios. We also find that commonly used carbon emissions can explain at most 60 percent of bank exposures estimated off general equilibrium models. Moreover, we find evidence of bank management of transition risk exposures. Banks that signed the Net-Zero Alliance have reduced their exposures compared to non-signatories, mainly by cutting lending to the riskiest industries.


Michael Barnett
Assistant Professor of Finance, W. P. Carey School of Business, Arizona State University

Organizing Committee

Michael Barnett, Arizona State University
Diego Kaenzig, Northwestern University
Alissa Kleinnijenhuis, Cornell University
Parinitha Sastry , Columbia University
Ishita Sen, Harvard University

Hyeyoon Jung

Hyeyoon Jung is a Financial Research Economist at the Federal Reserve Bank of New York. Her research interests lie in international finance, financial intermediation, asset pricing, and climate finance. Her primary research interests regard understanding the impact of frictions in financial intermediaries on asset prices and real economies. Hyeyoon holds a Ph.D. in Finance from NYU Stern, B.S. in Economics from UPenn Wharton, and B.AS from UPenn School of Engineering and Applied Science. Prior to graduate school, she worked as an FX & Rates trader at J.P. Morgan.

Paper and slides

US Banks' Exposure to Climate Transition Risk

US Banks' Exposure to Climate Transition Risk



Related Webinars

Young Scholars

April 29, 2024
Olivier Darmouni
Associate Professor
Columbia Business School

Young Scholars

March 25, 2024
Parinitha Sastry
Assistant Professor of Finance
Columbia Business School
March 11, 2024
Paul Hiebert
Paul Hiebert, Stephen Cecchetti
Head, Systemic Risk and Financial Institutions Division
European Central Bank
Stephen Cecchetti
Professor and Rosen Family Chair in International Finance
Brandeis International Business School

Upload Research

  • Accepted file types: pdf, Max. file size: 50 MB.
  • This field is for validation purposes and should be left unchanged.

Subscribe to Our Newsletter

  • This field is for validation purposes and should be left unchanged.

Donate Now