Banks and secured lending: environmental risks and due diligence

Brown, Lloyd A. 2014. Banks and secured lending: environmental risks and due diligence. PhD Thesis, Cardiff University. Item availability restricted.

	PDF - Supplemental Material Restricted to Repository staff only Download (2MB)
Preview	PDF - Accepted Post-Print Version Download (3MB) | Preview

Abstract

In the 1990s and early 2000s lender liability for the remediation of contaminated land was considered the greatest environmental risk for lenders. The threat of liability from Part IIA of the Environmental Protection Act 1990 initially drove the introduction and use of environmental due diligence in banks. But instances of such lender liability are now considered highly unlikely. It is because of the low risk of lender liability and the empirical knowledge gaps that existed in the literature basis that this research was necessary. The overarching research question of this thesis examines the lenders’ current perceptions of the threat of the environmental risks, as well as the main drivers for the use and development of environmental due diligence in banks. Unique interview data were collected from fifteen semi-structured interviews with elite banking professionals to test the research premise. There are three, primary environment-related risks. According to the banking respondents’ data the current environmental risk ranking is: (1) lender liability – low risk; (2) the indirect risks – medium risk(s); and (3) reputational risk – high risk. Thus reputational risk has now replaced lender liability as the greatest risk. The interview data further verify that banks use a range of due diligence techniques before and after the grant of loan finance to manage environmental risks. And further to this, the main driver for the continued use and development of environmental due diligence in banks has shifted from lender liability to reputational risk. Originality is assured in this thesis by the use of the interview data. The research fills the empirical knowledge gaps that existed in the literature basis, and has implications for the theory, practice and future research opportunities in a number of areas, including law and banking.

Item Type:	Thesis (PhD)
Status:	Unpublished
Schools:	Law
Subjects:	K Law > K Law (General)
Date of First Compliant Deposit:	30 March 2016
Last Modified:	02 Jan 2024 15:31
URI:	https://orca.cardiff.ac.uk/id/eprint/80782

Actions (repository staff only)

Edit Item