BIS paper proposes solution to ‘runnable brown assets’

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The Bank for International Settlements, Basel

The Bank for International Settlements, Basel

Research published by the Bank for International Settlements proposes a policy that could encourage polluting companies to clean up their act and also cut the risk of a run.

Eric Jondeau, Benoit Mojon and Cyril Monnet explore the risk of a run on “brown” assets, or those of companies with high carbon emissions. Changing investor preferences and government policy on climate change could lead to firms’ assets, such as fossil fuel reserves, becoming “stranded”, causing sudden falls in share price

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