Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/325484 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
SAFE Working Paper No. 455
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
I study the informational value of community resilience in credit markets during natural disasters. Exploiting a severe flood in Germany in 2013, I combine loan-level data on car loans with a composite measure of community resilience based on structural local characteristics linked to disaster recovery capacity. After the flood, only low-income borrowers faced credit tightening, but in high-resilience areas they experienced smaller rate hikes and maintained access to credit. Resilience also predicts repayment after disasters, yet banks ignore it in normal times. This state-contingent reliance shows that community resilience enters credit pricing only in crises, when its information content beyond standard borrower characteristics is valuable enough to justify adoption.
Subjects: 
Financial resilience
natural disasters
social capital
consumer credit
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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