Empirical Methods and Sustainable Finance

• Provide an overview of methods for evaluating regulatory changes and investigating other sustainability-related topics.
• Introduce participants to matching and difference-in-difference methodologies, applied to critically assess the features of sustainable credit markets and the impact of local climate policies.
• Explain key aspects of panel estimation, including saturation and fixed effects methods, used to analyse the relationship between monetary policy, risk-taking behavior, and climate risks.
• Acquaint participants with instrumentation strategies and their application to topics such as climate risk, the real estate market, and new business formation.
• Strengthen participants’ practical knowledge through a series of replication exercises.

The course targets mid- and high-level professionals in international and supranational organisations, ministries of finance, prudential authorities, development banks, and central banks, who have prior experience in empirical analysis or sustainable banking and finance. It is designed for those seeking a deeper understanding of how to evaluate regulatory changes and quantitatively explore other sustainable finance topics. The course may also appeal to emerging scholars and private-sector practitioners (e.g., consultancies, banks, investment funds) interested in sustainable finance.

Thursday, 6 February 

9:00 – 9:30 Welcome & coffee

9:30 – 11:00 Session 1 – Introduction (Ongena)

• Empirical methods in Sustainable Finance
• Evaluation of changes in regulation, and exploration of other sustainable topics

11:00 – 11:15 Coffee break

11:15 – 12:45 Session 2 – Matching, and Difference-in-Differences Part 1 (Ongena)

• Exact versus propensity score matching, difference-in-differences methodology
• Banks and sustainable loan terms for small firms; sustainable collateral

12:45 – 14:00 Light lunch

14:00 – 15:30 Session 3 – Saturation with Fixed Effects (Bilan)

• Panel estimation
• Monetary conditions and risk-taking
• Climate risks and monetary policy

15:30 – 15:45 Coffee break

15:45 – 17:15 Session 4 – Difference-in-Differences Part 2 (Bilan)

• Intensity of treatment, managing the control sample
• Towards a sustainable financial system: Macroprudential regulation of banks
• Effects of local climate policy

17:15 – 18:30 Aperitivo and/or office hours (to be booked in advance)

From 20:00 Dinner at the city center

Friday, 7 February 

9:00 – 9:30 Welcome & coffee

9:30 – 11:00 Session 5 – Instrumentation Part 1 (Bilan)

• Instrumentation strategies
• Credit constraints and housing collateral
• Climate risks in real estate

11:00 – 11:15 Coffee break

11:15 – 12:45 Session 6 – Instrumentation Part 2 and Modelling Dispersion (Ongena)

• Instrumentation with historical land and climate information; heteroskedastic model
• Wealth inequality and entrepreneurship; sustainable business models

12:45 – 14:00 Closing remarks and lunch

14:00 – 16:00 Session 7 – Practical session on replication exercises

Available soon