Natural disasters and bank stability: Evidence from the U.S. financial system

Felix Noth and Ulrich Schüwer

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We document that natural disasters significantly weaken the stability of banks with business activities in affected regions. This is reflected, among others, in higher probabilities of default and foreclosure ratios. The effects are economically relevant and suggest that insurance payments and public aid programs do not sufficiently protect bank borrowers against financial difficulties. We also find that the adverse effects dissolve after some years if no further disasters occur in the meantime.

JEL-codes: G21 Q54 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ban and nep-rmg
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168263

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