Comparative Economic Studies

, Volume 58, Issue 3, pp 317–334 | Cite as

What Role for Financial Supervisors in Addressing Environmental Risks?

  • Dirk Schoenmaker
  • Rens Van Tilburg
Symposium Article


A literature is rapidly developing on financial shocks originating from ecological imbalances. These shocks can be triggered by either intensified environmental policies, clean tech breakthroughs or due to the economic costs of crossing ecological boundaries. However, financial supervisors have so far given little attention to this ecological dimension. This allows systemic financial imbalances resulting from ecological pressures to build up and concentrate in financial institutions and markets. This paper sketches the ecological dimension of the prudential policy framework and illustrates the working for the case of carbon emissions.


prudential policy financial supervision environmental policies 

JEL Classifications

E58 G28 H23 H41 



The authors thank Daniel Gros, Lex Hoogduin, Clemens Kool, Christian Kopf, Evan Kraft, Arjen Siegmann, Peter Wierts, Simon Zadek, the members of the Sustainable Finance Lab, and the editor, Paul Wachtel, for stimulating discussions and useful suggestions. This paper was presented at the Design Options for a Sustainable Financial System conference organized by the Centre for International Governance Innovation and the UNEP Enquiry into the Design of a Sustainable Financial System, 1–3 December 2014, Waterloo, Canada, and at the Twenty-First Dubrovnik Economic Conference, 7–9 June 2015, Dubrovnik, Croatia.


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Copyright information

© Association for Comparative Economic Studies 2016

Authors and Affiliations

  1. 1.Department of Finance, Rotterdam School of Management, Erasmus University & BruegelRotterdamThe Netherlands
  2. 2.Sustainable Finance Lab, Utrecht UniversityUtrechtThe Netherlands

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