Improving the Prevention of Environmental Risks with Convertible Bonds

Abstract

A. Robe and Patrick Roger for insightful comments and discussions. The IFE (Institut Français de l'Energie) is aknowledged for financial support.

How to Reconcile Pandemic Business Interruption Risk With Insurance Coverage

“…Lastly, the technical issue remains to be addressed of building PBI cat bonds by integrating the elements developed in this paper. To our knowledge, the first attempt at undertaking this task can be found in Schmitt and Spaeter (2021).…”

“… See Lakdawalla and Zanjani (2012) for a simple and illustrative example of the advantages of partial collateralization in reinsurance mechanisms when risks are independent Schmitt and Spaeter (2021). mitigate this advantage over securitization by introducing correlation between the firms' business interruption risks.13 Note also that people are more inclined to invest in protection measures when the entire profit from their individual measures goes to the benefit of themselves, whereas pandemic risk mitigation calls for individually responsible behaviors in order to obtain a collective benefit.…”

Environmental liability under uncertain causation

“…The first branch of literature starts by observing that potentially judgement-proof defendants will take inefficiently low care and analyze whether the problem can be mitigated by third party liability or mandatory insurance [see e.g. Pitchford (2001), Lewis and Sappington (2001), Balkenborg (2001), Boyd and Ingberman (2003), Feess and Hege (2003), Ulph and Valentini (2004), Schmitt and Spaeter (2005) and Hutchinson and van't Veld (2005)]. A second string has analyzed the combination of command and control tools in environmental policy with liability law (Hiriart et al (2004), Wirl and Huber (2005), Boyer and Porrini (2004)).…”

L'incidence des régimes de responsabilité environnementale sur les comportements de prévention et d'assurance des firmes

“…En souscrivant ces titres, la banque peut choisir de rester simple créancier ou de devenir actionnaire de la firme lorsque les profits générés sont suffisamment élevés. Un contrat d'obligations convertibles permettrait de rendre l'emprunt moins coûteux 2 et donc d'améliorer la solvabilité de la firme : elle peut alors, sous certaines conditions, être amenée à investir plus en prévention (Schmitt et Spaeter [2002]).…”