Template-type: ReDif-Paper 1.0
Author-Name: Bos, Jaap
Author-workplace-name: Finance, RS: GSBE EFME
Author-Name: Li, Runliang
Author-workplace-name: Finance, RS: GSBE EFME
Title: Understanding the Trembles of Nature: How Do Disaster Experiences Shape Bank Risk Taking?
Abstract: This paper examines the impact of natural disaster experiences on banks’ business practices. Using earthquake and banking data for California, we find that banks that have had stronger earthquake experiences change their practices, both as a result of the natural disasters’ effects on local deposit supply and through changes in banks’ risk perceptions. These banks have a smaller exposure to real estate, maintain higher equity levels, and are more likely to lend to high-income borrowers. This paper confirms, therefore, that institutional memory exists in the banking sector and that banks and communities adapt to natural disasters interactively.
Classification-JEL: d53,d83,g11,g21,q54
Series: GSBE Research Memoranda
Creation-Date: 20171214
Number: 033
File-URL: https://cris.maastrichtuniversity.nl/ws/files/17782847/RM17033.pdf
File-Format: application/pdf
File-Size: 1315683
Handle: Repec:unm:umagsb:2017033
DOI: 10.26481/umagsb.2017033