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Banks versus Hurricanes: A Case Study of Puerto Rico after Hurricanes Irma and Maria

Author

Listed:
  • Peter Anagnostakos
  • Jason Bram
  • Benjamin Chan
  • Natalia Fischl-Lanzoni
  • Hasan Latif
  • James M. Mahoney
  • Donald P. Morgan
  • Ladd Morgan
  • Ivelisse Suarez

Abstract

We study Puerto Rico’s experience after the severe hurricane season of 2017 to better understand how extreme weather disasters affect bank stability and their ability to lend. Despite the devastation wrought by two category 5 hurricanes in a single month, we find relatively modest and transitory impacts on bank performance with no evident decline in lending capacity. We discuss various mitigants that help limit bank exposure to extreme weather and whether these mitigants may be vulnerable given the potential for more severe and more impactful climate events.

Suggested Citation

  • Peter Anagnostakos & Jason Bram & Benjamin Chan & Natalia Fischl-Lanzoni & Hasan Latif & James M. Mahoney & Donald P. Morgan & Ladd Morgan & Ivelisse Suarez, 2023. "Banks versus Hurricanes: A Case Study of Puerto Rico after Hurricanes Irma and Maria," Staff Reports 1078, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:97348
    DOI: 10.59576/sr.1078
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    References listed on IDEAS

    as
    1. Justin Gallagher & Daniel Hartley, 2017. "Household Finance after a Natural Disaster: The Case of Hurricane Katrina," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 199-228, August.
    2. Mr. Sebastian Acevedo Mejia, 2016. "Gone with the Wind: Estimating Hurricane and Climate Change Costs in the Caribbean," IMF Working Papers 2016/199, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate change; physical risks; hurricanes; banks; Puerto Rico;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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