Tracing Out Capital Flows: How Financially Integrated Banks Respond to Natural Disasters

Kristle Cortes and Philip E. Strahan
Authors registered in the RePEc Author Service: Todd Clark and Andrea Carriero

No 1412, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Multi-market banks reallocate capital when local credit demand increases after natural disasters. Following such events, credit in unaffected but connected markets declines by about 50 cents per dollar of additional lending in shocked areas, but most of the decline comes from loans in areas where banks do not own branches. Moreover, banks increase sales of more-liquid loans in order to lessen the impact of the demand shock on credit supply. Larger, multi-market banks appear better able than smaller ones to shield credit supplied to their core markets (those with branches) by aggressively cutting back lending outside those markets.

Keywords: Financial Integration; Branch Banking; Securitization (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-09-18
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Tracing out capital flows: How financially integrated banks respond to natural disasters (2017)
Working Paper: Tracing Out Capital Flows: How Financially Integrated Banks Respond to Natural Disasters (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1412

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DOI: 10.26509/frbc-wp-201412

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