Climate Change-Related Disasters ‘Not Very’ Impactful on Bank Financial Stability: New York Fed

The Epoch Times Header

A new study from the New York Federal Reserve examining the impact of climate change via extreme weather events on bank financial stability throws cold water on the heated rhetoric around climate change, finding that the threat to banks from natural disasters is trivial while suggesting that a bigger danger to financial institutions comes from policies meant to shield them from such risks.

The Fed report sought to gauge how banks fared against past disasters by examining FEMA-level disasters between 1995 and 2018 and county-level property damage estimates from SHELDUS (Spatial Hazard Events and Losses Database for the United States). The authors concluded the impact was insignificant.

“Not very,” the three authors of the study wrote, positing an answer to the question posed in the title of the report: “How Bad Are Weather Disasters for Banks?”

“We find that weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance,” the authors wrote, adding that the stability seems more to do with the intrinsic resilience of financial institutions than any federal aid they may have received in response to extreme weather events.

Profit-Boosting Impact of Disasters

For bigger banks, it turns out that disasters increased loan demand and actually boosted profits, the study says.

“Losses at larger (multi-county) banks are barely affected and their income increases significantly with exposure,” the authors wrote.

Local banks, too, demonstrated resilience to extreme weather events, although the study found they did experience more negative stability impacts from extreme disasters.

“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,” the authors wrote.

But even though local banks are more prone to suffering instability impacts from disasters, these were not found to have been significant enough to threaten bank solvency.

“In particular, loan losses and default risk at local banks do not increase significantly,” the authors wrote. “Charge-offs at multi-county banks increase but the impact is very small. Moreover, not all effects are bad; income of multi-county banks increase significantly with disaster exposure.”

By Tom Ozimek

Read Full Article on TheEpochTimes.com

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Columns

Florida Passes a Bill to Stop Weather Manipulation

Florida State Senate passed a bill “SB 56 Geoengineering and Weather Modification Activities” to ban weather modification in and around state.

The Proxy War – That Wasn’t

Britain, Europe and Biden Admin put us at risk of major conflict over past 3 years with self-serving political agenda and leadership away from geopolitical stability.

 Trump’s Tariffs Will Work Terrific!

It is really odd when globalists and lefties put...

Nationwide Injunctions Place US Waist Deep in the Big Muddy

Judges issuing nationwide injunctions are taking the U.S legal system to the neck-deep water of the big muddy, and those fool judges say, “Push on.” 

Confessions of a Censored Conservative

Trump declared the end to censorship in the fed govt, but it is still happening in the private sector, especially to conservatives. The fight continues.

News

FBI Investigates Vandalism of Tesla Charging Station in Washington State

FBI is investigating incident that severely damaged a Tesla Supercharger station in WA state, the latest in a growing wave of vandalism targeting Tesla.

Supreme Court Pauses Orders Forcing Trump Admin to Rehire Labor Board Members

U.S. Supreme Court temporarily paused two lower court rulings that blocked the president from firing members of independent labor boards.

US Stock Indexes Skyrocket Following Trump’s Tariff Pause

U.S. stock indexes surged following President Trump's announcement on Wednesday that he'll pause reciprocal tariffs for most countries except for China.

DHS to Begin Screening Immigrants’ Social Media for Anti-Semitism, Terrorist Ties

DHS will review immigrants’ social media activity for anti-Semitic content, including support for terrorist orgs, as part of immigration vetting process.

US Spy Chief Gabbard Starts Task Force to Investigate Intelligence Community

DNI head Tulsi Gabbard said she is setting up a task force to cut costs and root out what she said is “weaponization” of the government.

In El Salvador, Locals Proud of Efforts to Lock Up Gangs—Including for US

After decades of civil war and gang violence, many...

Harvard to Borrow $750 Million Amid Federal Funding Uncertainty

The Ivy League school faces heightened scrutiny over its...

Northwestern, Cornell Universities Face Federal Funding Freeze Amid Civil Rights Probes

Trump admin is freezing $1 billion in federal funds at Cornell Univ and $790 million at Northwestern Univ, as they face civil rights investigations.
spot_img

Related Articles

Popular Categories

MAGA Business Central