How Bad Are Weather Disasters for Banks?
Weather disasters have a small and declining effect on bank operations and financial success.
From the report:
We find that weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance. ... Disasters increase loan demand, which offsets losses and actually boosts profits at larger banks. Local banks tend to avoid mortgage lending where floods are more common than official flood maps would predict, suggesting that local knowledge may also mitigate disaster impacts.