IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10326.html
   My bibliography  Save this paper

Banking Sector Risk in the Aftermath of Climate Change and Environmental-RelatedNatural Disasters

Author

Listed:
  • Nie,Ou
  • Regelink,Martijn Gert Jan
  • Wang,Dieter

Abstract

Climate change and environmental risks are increasingly recognized as a concern for financialauthorities, yet empirical evidence of the damage for bank balance sheets is relatively scant. This paper providespreliminary estimates of the aggregate impact of physical risks from climate and environmental-related naturaldisasters on bank balance sheets across 184 countries over nearly 40 years. Using the local projection method, theanalysis finds that severe disaster episodes lead to an increase in the level of systemwide non-performing loans,which is persistent over time. The paper complements the cross-country results with a country-specific example, whichfinds that typhoon damages lead to a significant increase in non-performing loans in the Philippines between 2011 and2018. The results suggest a role for financial policy and supervision to monitor, assess, and mitigate climate andenvironmental related physical risks to the banking sector.

Suggested Citation

  • Nie,Ou & Regelink,Martijn Gert Jan & Wang,Dieter, 2023. "Banking Sector Risk in the Aftermath of Climate Change and Environmental-RelatedNatural Disasters," Policy Research Working Paper Series 10326, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10326
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099614202282325736/pdf/IDU010b823eb0a253042430a92f0c19e5f0c80bc.pdf
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:wbk:wbrwps:10326. 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.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.