Bernardo Marques, alumn, researcher at CEGE and lecturer at CPBS, will receive funding of approximately 211 800 euros through the Competition for Scientific Employment - Individual - 5th Edition (CEEC Individual) of the Foundation for Science and Technology (FCT), in the category of Junior Researcher, in the panel Economics and Business, Social and Economic Geography, for a period that can extend up to 6 years.
Entitled "The impact of climate risk on bank lending, pricing, and resilience", this project allows to reflect on what has been considered by regulators and banking supervisors, since the Paris Agreement of 2015, as a growing concern about the need for banks to consider the effects of climate risk in their activity. These effects may occur, for example, whenever an extreme weather event (e.g., a major flood) affects a significant number of local businesses, preventing the normal fulfillment of their responsibilities towards the bank. On the other hand, in a long term perspective, the transition to a green economy will impose costs on more polluting industries, which may significantly affect the credit quality of companies in these industries.
In this context, the project is organized in two blocks: the first is oriented to study the impact of extreme weather events on access and pricing of credit operations to companies located in the regions most affected by the event (in particular, the effect of the 2017 large fires will be studied); the second block foresees the development of a methodology for stress testing banks' creditworthiness under different climate change scenarios - a requirement that supervisors and regulators are now starting to demand from banks.
The project will use several sources of microdata, including bank loans (Bank of Portugal), burnt areas (ICNF) and climate evolution (IPMA), and it is planned to collaborate with researchers from national and international entities (e.g. European Central Bank).
The Contest to Stimulate Individual Scientific Employment is a direct support for the hiring of doctoral researchers in all scientific areas, through annual calls promoted by the FCT, which promote the continuous and systematic integration of new doctoral graduates in institutions.
