Publication:
Banking Sector Risk in the Aftermath of Climate Change and Environmental-Related Natural Disasters

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dc.contributor.authorNie, Owen
dc.contributor.authorRegelink, Martijn
dc.contributor.authorWang, Dieter
dc.date.accessioned2023-04-06T17:47:08Z
dc.date.available2023-04-06T17:47:08Z
dc.date.issued2023-02
dc.description.abstractClimate change and environmental risks are increasingly recognized as a concern for financial authorities, yet empirical evidence of the damage for bank balance sheets is relatively scant. This paper provides preliminary estimates of the aggregate impact of physical risks from climate and environmental-related natural disasters on bank balance sheets across 184 countries over nearly 40 years. Using the local projection method, the analysis finds that severe disaster episodes lead to an increase in the level of systemwide non-performing loans, which is persistent over time. The paper complements the cross-country results with a country-specific example, which finds that typhoon damages lead to a significant increase in non-performing loans in the Philippines between 2011 and 2018. The results suggest a role for financial policy and supervision to monitor, assess, and mitigate climate and environmental related physical risks to the banking sector.en
dc.identifierhttp://documents.worldbank.org/curated/en/099614202282325736/IDU010b823eb0a253042430a92f0c19e5f0c80bc
dc.identifier.doi10.1596/1813-9450-10326
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/39641
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers; 10326
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectCLIMATE CHANGE MITIGATION
dc.subjectCLIMATE CHANGE
dc.subjectNATURAL DISASTERS
dc.subjectPHYSICAL RISKS
dc.subjectFINANCIAL STABILITY
dc.subjectBANKING
dc.subjectNONPERFORMING LOANS
dc.titleBanking Sector Risk in the Aftermath of Climate Change and Environmental-Related Natural Disastersen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleBanking Sector Risk in the Aftermath of Climate Change and Environmental-Related Natural Disasters
okr.date.disclosure2023-02-28
okr.date.lastmodified2023-02-28T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099614202282325736/IDU010b823eb0a253042430a92f0c19e5f0c80bc
okr.guid099614202282325736
okr.identifier.docmidIDU-10b823eb-a253-4243-a92f-c19e5f0c80bc
okr.identifier.doi10.1596/1813-9450-10326
okr.identifier.externaldocumentum34010561
okr.identifier.internaldocumentum34010561
okr.identifier.reportWPS10326
okr.import.id351
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099614202282325736/pdf/IDU010b823eb0a253042430a92f0c19e5f0c80bc.pdfen
okr.sectorOther Public Administration
okr.topicMacroeconomics and Economic Growth::Climate Change Economics
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicFinance and Financial Sector Development::Insurance & Risk Mitigation
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.unitEFI-FCI-Risk Finance (EFNRF)
okr.unitEFI-EAP-FCI-Finance-2 (EEAF2)
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