Assessing the influences of green macro-prudential policy on green material monitoring: Fresh insights from global database

Abstract

This study highlights the critical role of green macro-prudential policy (GMPP) in green material monitor (GMM). Using data from 64 countries from 2000 to 2022, the analysis uses the panel vector autoregressive method and the dynamic panel threshold model. The results suggest that GMPP received positive shocks from GMM in the first period, and its responses turned negative from the second period onwards. In contrast, the impact of GMPP on GMM was negative and became more significant in the first four periods. Its negative impacts decreased to zero by the end of the period. Furthermore, the threshold quantity of green macro-policy is 87.5%. Below the threshold, GMPP hurts total resource usage (green accounting), while above the threshold, this effect becomes less significant. Therefore, central banks should link preferential credit and refinancing rates to verified environmental disclosures, thereby motivating firms to adopt transparent GMM. Such a GMPP aligns financial incentives with sustainability reporting and strengthens accountability in the financial system.