IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2025-06.html
   My bibliography  Save this paper

Spatially Mapping Banks' Commercial & Industrial Loan Exposures: Including an Application to Climate-Related Risks

Author

Abstract

The correlation of the spatial distribution of banking exposures with changes in spatial patterns of economic activity (e.g., internal migration, changes in agglomeration patterns, climate change, etc.) may have financial stability implications. We therefore study the spatial distribution of large U.S. banks' commercial and industrial (C&I) lending portfolios. We construct a novel dataset that augments FR Y-14Q regulatory data with borrower microdata for a more granular understanding of where banks' exposures are located by looking beyond headquarters to the location of facilities. We find that banks are exposed to almost all U.S. counties, with clustered exposure in certain geographies. We then use our dataset for a climate-related application by analyzing what fraction of C&I loans have been extended to firms that operate in areas vulnerable to physical risks, identifying, for example, counties where both (i) banks are highly exposed via their lending portfolios, and (ii) physical risks have historically resulted in large losses. Results of this kind can help inform risk management and be used to improve resilience to future stresses.

Suggested Citation

  • Benjamin Dennis & Gurubala Kotta & Caroline Norris, 2025. "Spatially Mapping Banks' Commercial & Industrial Loan Exposures: Including an Application to Climate-Related Risks," Finance and Economics Discussion Series 2025-006, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2025-06
    DOI: 10.17016/FEDS.2025.006
    as

    Download full text from publisher

    File URL: https://www.federalreserve.gov/econres/feds/files/2025006pap.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.17016/FEDS.2025.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Bank lending to firms; Climate risks; Mapping of firm facilities; Spatial lending patterns;
    All these keywords.

    JEL classification:

    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2025-06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.