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
No 1412, Working Papers (Old Series) from Federal Reserve Bank of Cleveland
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
New Economics Papers: this item is included in nep-ban
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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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