How do banks react to catastrophic events? Evidence from hurricane Katrina
- This paper explores how banks adjust their risk-based capital ratios and asset allocations following an exogenous shock to their asset quality caused by Hurricane Katrina in 2005. We find that independent banks based in the disaster areas increase their risk-based capital ratios after the hurricane, while those part of a bank holding company do not. The effect on independent banks mainly comes from the subgroup of high-capitalized banks. These banks increase their holdings in government securities and reduce loans to non-financial firms. Hence, banks that become more stable achieve this at the cost of reduced lending.
| Author: | Claudia Lambert, Felix Noth, Ulrich Schüwer |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-371971 |
| URL: | http://ssrn.com/abstract=2585521 |
| Parent Title (English): | SAFE working paper series ; No. 94 |
| Series (Serial Number): | SAFE working paper (94) |
| Publisher: | SAFE |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Year of Completion: | 2015 |
| Year of first Publication: | 2015 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2015/03/31 |
| Tag: | bank regulation; capital ratios; catastrophic events; natural experiment |
| Issue: | March, 2015 |
| Page Number: | 50 |
| HeBIS-PPN: | 358959519 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
| Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
