February 2022

Post n°257

Climate transition scenarios and financial risk

Published on 02/25/2022

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By Carlos Mateo Caidedo Graciano, Laurent Clerc, Fulvio Pegoraro and Marie Rabate

As part of the first climate pilot exercise, the Banque de France and the ACPR developed a series of models to quantify the financial risks associated with different climate transition scenarios. We present some of the results in this post. In some scenarios, the oil industry's probability of default is expected to increase by 400 bps, its credit spread by 30 bps and its stock market valuation is expected to decrease by 40-50% in 2050.

Chart 1: Changes in probabilities of default for the most affected sectors (PDs in bps in deviation from the orderly scenario)
Chart 1: Changes in probabilities of default for the most affected sectors (PDs in bps in deviation from the orderly scenario) Source: authors’ calculations.
Updated on 02/25/2022 17:53
Post n°256

Financial savings, debt and money holdings during the pandemic

Published on 02/11/2022

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By Louis Bê Duc

The increase in the money holdings by the non-financial sector in the euro area and the United States during the pandemic is explained by the strong increase in financial savings linked to public transfers and the sustained growth of loans, and in particular (in the euro area), government-guaranteed loans. Portfolio shifts strengthened the monetary dynamics in the United States, while they dampened them in the euro area.

Chart 1. Sources of change in money holdings by households in the euro area (Change in annual flows as a % of GDP)
Chart 1. Sources of change in money holdings by households in the euro area (Change in annual flows as a % of GDP) Source: Euro area sector accounts, ECB.
Updated on 02/25/2022 18:43
Post n°255

“Too little, too late”: Impact of a disorderly climate transition

Published on 02/08/2022

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By Annabelle de Gaye and Noëmie Lisack

In order to evaluate the financial risks linked to climate change, the Banque de France and ACPR have developed a suite of models that quantify adverse low-carbon transition scenarios for France. While the short-term macroeconomic effect is limited, the key impacts are located at the sector level and are strongly heterogeneous. A second blog post will examine the issue of financial stability.

Chart 1: Impact of disorderly transitions on total and sectoral activity in France in 2050 (compared with an orderly transition)
Chart 1: Impact of disorderly transitions on total and sectoral activity in France in 2050 (compared with an orderly transition) Source: Authors’ calculations
Updated on 02/08/2022 18:07
Post n°254

Working from home and corporate real estate

Published on 02/02/2022

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By Antonin Bergeaud, Jean-Benoît Eymeoud, Thomas Garcia and Dorian Henricot

Corporate real estate market participants are starting to adjust to the take-off of teleworking in France. We show that teleworking already has an impact on the office real estate market. In French départements more exposed to teleworking, the Covid-19 crisis has led to higher vacancy rates, less construction, and lower prices. Forward-looking indicators suggest that market participants are expecting a lasting shift towards teleworking.

Chart 1a: Teleworking index by département
Chart 1a: Teleworking index by département Source: Bergeaud et al., 2021
Updated on 02/03/2022 11:41