Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148305
Authors: 
Koetter, Michael
Noth, Felix
Rehbein, Oliver
Year of Publication: 
2016
Series/Report no.: 
IWH Discussion Papers 31/2016
Abstract: 
We test if and how banks adjust their lending in response to disaster risk in the form of a natural catastrophe striking its customers: the 2013 Elbe flooding. The flood affected firms in East and South Germany, and we identify shocked banks based on bank-firm relationships gathered for more than a million firms. Banks with relationships to flooded firms lend 13-23% more than banks without such customers compared to the preflooding period. This lending hike is associated with higher protability and reduced risk. Our results suggest that local banks are an effective mechanism to mitigate rare disaster shocks faced especially by small and medium firms.
Subjects: 
disaster risk
credit demand
natural disaster
relationship lenders
JEL: 
G21
G29
O16
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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