Local Banks and flood risk: the case of Germany

Andrea Pagano (), Mario Bellia, Francesca Di Girolamo () and Georgios Papadopoulos
Additional contact information
Andrea Pagano: European Commission, https://joint-research-centre.ec.europa.eu/index_en
Francesca Di Girolamo: European Commission, https://joint-research-centre.ec.europa.eu/index_en

No 2023-13, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: This paper uses a simulation model to evaluate the effects of river flooding events occurring within Germany on regional' banks. Under a 1.5 degrees Celcius increase in temperature, the impact is overall rather small, even accounting for the devaluation of loans exposed to floods. However, under a 3 degrees Celcius increase, bank losses can reach 1% of total assets. We show that the implementation of adaptation solutions would be successful in keeping risks at the current level.

Keywords: Physical risk; river flood events; dynamic balance sheet; banking crisis (search for similar items in EconPapers)
JEL-codes: C15 G2 Q54 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2023-11
New Economics Papers: this item is included in nep-env, nep-eur and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:jrs:wpaper:202313

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