Bank and state cooperation in green transition: What is the political nature of this alliance?

Question

Are there any political scientists addressing the relationship between banks and states in the era of climate change?

I know this is a broad topic and I would assume I could easily find research articles. However, I am more interested in researchers who are perhaps also blogging about their research on this topic.

Also, I am particularly interested in writers who address risk distribution and cooperation (or lack thereof) between states and banks. It seems to me that banks have to assess new kinds of risks due to climate change. States want, on the one hand, banks to drive investments pushing the green agenda and, on the other hand, want to ensure financial stability, regulation and limits to banks' risks. States themselves are cooperating to some extent in order to prevent or manage climate change. And there is a ton of writing on banks and on state policies, but I find very little trying to analyze the relationship between banks and the state, where does state responsibility begin and bank business end? How is this labor of division drawn? And how is it influenced by green transition?

Any pointers towards interesting analysis on this topic is much appreciated.

Answer 1

The reason for Basel 1 and the lot has to do how with how banks go around their core function: managing money and societies' risk exposure to how they manage money. Mostly it has to with reserve capital IIRC.

For banks, other than development banks, funding green transitions may very well be something they choose to do, either to pursue profit or to look good. But it is not their core mission, nor are they major factor in increasing climate risk (unlike their daft loan practices in 2000-2008), so why should they be regulated on it? If they don't get regulated then what exactly do you want States to do?

Society should tackle climate change head on, by reducing emissions and putting a cost on the negative externalities of CO2 (carbon pricing) by industries and consumers.

Banks are not major emitters so don't really seem a valid target. Though some measures to facilitate effective green investments, either by cutting red tape or preferential tax rates could involve banks as facilitators.