Publication: Financial and Fiscal Instruments for Catastrophe Risk Management : Addressing Losses from Flood Hazards in Central Europe
Date
2012-07-05
ISSN
Published
2012-07-05
Author(s)
Abstract
This report addresses the large flood
exposures of Central Europe and proposes efficient financial
and risk transfer mechanisms to mitigate fiscal losses from
natural catastrophes. In particular, the Visegrad countries
(V-4) of Central Europe, namely, Poland, the Czech Republic,
Hungary, and the Slovak Republic, have such tremendous
potential flood damages that reliance on budgetary
appropriations or even European Union (EU) funds in such
circumstances becomes ineffective and does not provide
needed cash funds for the quick response and recovery needed
to minimize economic disruptions. The report is primarily
addressed to the governments of the region, which should
build into their fiscal planning the necessary contingent
funding mechanisms, based on their exposures. The report is
addressed to finance ministries and also to the insurance
and securities regulators and the private insurance and
capital markets, which may all play a role in the proposed
mechanisms. An arrangement using a multi-country pool with a
hazard-triggered insurance payout mechanism complemented by
contingent financing is proposed, to better manage these
risks and avoid major fiscal volatility and disruption.
Citation
“Pollner, John. 2012. Financial and Fiscal Instruments
for Catastrophe Risk Management : Addressing Losses from
Flood Hazards in Central Europe. World Bank Study. © Washington, DC: World Bank. http://openknowledge.worldbank.org/entities/publication/27ac4235-a061-5a77-a96b-1c3cd43c344d License: CC BY 3.0 IGO.”