Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203295
Authors: 
Schüwer, Ulrich
Lambert, Claudia
Noth, Felix
Year of Publication: 
2017
Series/Report no.: 
SAFE Working Paper 94
Abstract: 
This paper explores how banks react to an exogenous shock caused by Hurricane Katrina in 2005, and how the structure of the banking system affects economic development following the shock. Independent banks based in the disaster areas increase their risk-based capital ratios after the hurricane, while those that are part of a bank holding company on average do not. The effect on independent banks mainly comes from the subgroup of high-capitalized banks. These independent and high-capitalized banks increase their holdings in government securities and reduce their total loan exposures to non-financial firms, while they also increase new lending to these firms. Regarding local economic developments, affected counties with a relatively large share of independent and high-capitalized banks exhibit higher economic growth than the other affected counties after the catastrophic event.
Subjects: 
catastrophic events
bank regulation
capital ratios
banking structure
economic development
JEL: 
G21
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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