The Green Bond Market and the Banking Sector

This book provides a comprehensive and rigorous examination of the green bond market and its interaction with the banking sector. It offers an integrated analysis of market practices, institutional standards and pricing dynamics, with particular attention to the distinctive role of banks as regulated financial intermediaries. Over the past decade, green bonds have become a central instrument within sustainable finance, supporting the financing of environmentally oriented projects and activities. Despite their rapid growth, existing research remains fragmented across regulatory discussions, descriptive market analyses, and empirical pricing studies. Moreover, limited attention has been devoted to the specific position of banks within this market, even though they represent a major issuer category and occupy a structurally different role compared to corporate or sovereign issuers. The book first describes the institutional evolution of the green bond market, clarifying the role of market-based standards, reporting frameworks, and external review mechanisms. It then provides a detailed empirical mapping of the market’s structure, examining issuance trends, issuer composition, financial characteristics, and use-of-proceeds patterns. A dedicated chapter investigates the pricing of bank-issued green bonds, assessing whether environmental labelling is associated with measurable yield differentials within the banking sector. Finally, the analysis extends to the broader role of banks in sustainable finance, discussing the interaction between green bond funding, sustainable lending, regulatory metrics such as the Green Asset Ratio, and climate-related supervisory frameworks. By combining regulatory analysis, bond-level evidence, and institutional perspective, the book offers a structured understanding of how green bonds operate within capital markets and how banks engage with sustainable finance instruments. This book will be of interest to scholars and researchers in banking and sustainable finance, graduate students in finance and economics, and practitioners and policymakers interested in the functioning and development of green capital markets.