Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108874
Authors: 
Lambert, Claudia
Noth, Felix
Schüwer, Ulrich
Year of Publication: 
2015
Series/Report no.: 
SAFE Working Paper Series 94
Abstract: 
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.
Subjects: 
catastrophic events
bank regulation
capital ratios
natural experiment
JEL: 
G21
G28
Document Type: 
Working Paper

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