Polish household default risk and physical risk of climate change

Kurowski Łukasz () and Sokal Katarzyna ()
Additional contact information
Kurowski Łukasz: Warsaw School of Economics
Sokal Katarzyna: Warsaw School of Economics

Financial Internet Quarterly (formerly e-Finanse), 2023, vol. 19, issue 3, 87-99

Abstract: This paper aims to assess the level of credit risk (from the perspective of default risk) among Polish households associated with the physical risks of climate change. In order to determine the potential impact of the physical risk of climate change on household credit risk, we conducted CAWI interviews with 1,006 borrowers residing in different Polish voivodeships (to account for heterogeneity of credit exposures to extreme weather events). According to these respondents, wildfires and storms in Poland are the greatest source of physical risk of climate change. In the event of a wildfire or storm, approximately 13% of borrowers would not be able to repay their loans while not being insured, which potentially increases banks’ credit risk and exposes banks to losses. However, we find that households underestimate the credit risk that could arise from a drought.

Keywords: Physical Risk; Credit Risk; Household Debt; Extreme Weather (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/fiqf-2023-0021 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:19:y:2023:i:3:p:87-99:n:3

DOI: 10.2478/fiqf-2023-0021

Access Statistics for this article

Financial Internet Quarterly (formerly e-Finanse) is currently edited by Tomasz Skica

More articles in Financial Internet Quarterly (formerly e-Finanse) from Sciendo
Bibliographic data for series maintained by Peter Golla ().