Social Responsibility and Bank Resiliency

Gehrig, Thomas, Iannino Maria Chiara & Unger, Stephan, 2021, CEPR-DP 15816, London: 
https://econpapers.repec.org/paper/cprceprdp/15816.htm  

ECGI-Discussion Paper 755/2021, Brüssel: https://ecgi.global/working-paper/social-responsibility-and-bank-resiliency  

Abstract: We provide transatlantic evidence about the relation between social responsibility and resiliency in the banking industry. We analyse various measures of resiliency, an exposure measure (SRISK) and a contribution measure (Delta CoVaR) to systemic risk, as well as measures of systematic risk (beta) and insolvency risk (z-score). Social responsibility is measured by Thomson Reuters' ESG-scores and their subcategories, both according to the older Asset 4 and the present TR ESG Refinitiv classification. We find that the social aggregate score significantly enhances resiliency in all dimensions and in both classifications. On the level of subcategories, we identify significant common resiliency enhancing factor proxies for long-term orientation, such as product responsibility and workforce training, while short-term objectives proxied by shareholder orientation tend to relate to lower levels of resiliency. Looking deeper into the components of each ESG pillar, we also discover significant transatlantic differences mainly related to the different organization of labour markets as well as the board structure.

 Did the Basel Process of banking regulation enhance the resilience of the European banking sector?

Gehrig, Thomas & Iannino Maria Chiara, 2021:
www.sciencedirect.com/science/article/pii/S1572308921000644

Abstract: This paper analyses the evolution of the safety and soundness of the European banking sector during the various stages of the Basel process of capital regulation. We document the evolution of various measures of systemic risk as the Basel process unfolds. Most strikingly we find that the exposure to systemic risk as measured by SRISK has been steeply rising for the highest quintile, moderately rising for the second quintile, and remaining roughly stationary for the remaining three quintiles of listed European banks. This observation suggests that during the Basel process, systemic risk has been contained for the majority of European banks, but not for the largest and riskiest institutions. When analyzing the sources of systemic risk we find compelling evidence that the increase in exposure to systemic risk (SRISK) is tied to the implementation of internal models for determining credit risk, as well as market risk. Based on this evidence, the sub-prime crisis found especially the largest and more systemic banks ill-prepared and lacking resiliency. This condition has been aggravated during the European sovereign crisis. The Banking Union has not restored aggregate resiliency to pre-crisis levels. Finally, low-interest rates considerably affect the contribution to systemic risk, particularly for the riskier banks.

 Impact of congestion pricing schemes on costs and emissions of commercial fleets in urban areas

Zhang Shu, Campbell Ann M. & Jan F. Ehmke, 2019: https://doi.org/10.1002/net.21872 

Abstract: As urbanization increases, municipalities across the world have become aware of the negative impacts of road-based transportation, which include traffic congestion and air pollution. As a result, several cities have introduced tolling schemes to discourage vehicles from entering the inner city. However, little research has been done to examine the impact of tolling schemes on the routing of commercial fleets, especially on the resulting costs and emissions. In this study, we investigate a vehicle routing problem considering different congestion charge schemes for several city types. We design comprehensive computational experiments to investigate whether different types of tolling schemes work in the way municipalities expect and what factors affect the performance of the congestion charge schemes. We compare the impact on a company's total costs, fuel usage (which drives emissions), and delivery tour plans. Our experimental results demonstrate that some congestion pricing schemes may even increase the emissions in the city center, and higher congestion charges may not necessarily lead to lower emissions.

More Information: https://busan.univie.ac.at/research/ 

ERN-Flashtalk "Green Routing and Green Logistics": https://youtu.be/KG_XHUdhFU0