Transmission of natural disasters to the banking sector: Evidence from thirty years of tropical storms in the Caribbean

Michael Brei, Preeya Mohan, Agustin Perez Barahona and Eric Strobl
Additional contact information
Eric Strobl: Department of Economics, University of Bern

Post-Print from HAL

Abstract: Banks can play a vital role in helping affected communities to cope with natural disasters. Using data on 92 damaging tropical storms, this paper explores the channels through which 111 individual banks from 20 Caribbean and Central American jurisdictions have been affected. Our results suggest that damaging tropical storms are associated with immediate and long-lasting adverse funding shocks. Banks from the small island economies face withdrawals of deposits, while banks from the continental countries are affected by adverse shocks to short-term funding. In both regions bank lending to the private sector drops in the initial years. The natural disaster shock is associated with persistent loan defaults and bank losses in the continental countries, whereas in the small island economies losses only start materializing after four years. In the two regions, the tropical storm recovery is thus credit-less.

Date: 2024-03
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Journal of International Money and Finance, 2024, 141, pp.103008. ⟨10.1016/j.jimonfin.2023.103008⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Transmission of natural disasters to the banking sector: Evidence from thirty years of tropical storms in the Caribbean (2024)
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:hal:journl:hal-04538857

DOI: 10.1016/j.jimonfin.2023.103008

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().