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

Can Ramaphosa and Trump Come to Terms?

Whether South Africa can quell the hostility emanating from Washington, without compromising on its national priorities, is a formidable test for a country

Maddened Europe

Viable prospects for peaceful settlement of conflict between Moscow and Kyiv exist, but Europe obsesses over threat of incursion onto European territory.

BOMBSHELL: DOGE Proves Democrats Guilty of Election Fraud!

As the old expression goes, “That didn’t take long!” Over...

Tariffs Will Make America Rich Again

The US won World War II because we could outproduce our enemies, Peter Navarro explained, and the American “arsenal of democracy” permitted the Allies to triumph.

America’s sport export

The popularity of baseball in Japan and Korea contrasts to a shrinking American audience where the average age of your MLB fan is a 57-year-old Caucasian man. 

News

FTC Chairman Raises Concerns Over Sale of 23andMe DNA Data

FTC said it was worried about the safety of the personal data of Americans who were previously customers of genetic testing company 23andMe.

Judge Dismisses COVID Lawsuit Against Former New York Gov. Cuomo

Judge dismissed class-action lawsuit against former Gov. Andrew Cuomo that blamed his admin for COVID-19 deaths in nursing homes across NY.

Tesla Firebombing Suspect Hit With Federal Charges

The U.S. Dept of Justice has filed federal charges against a suspect in connection with a firebombing attack on a Tesla dealership in Loveland, Colorado.

What to Expect From Trump’s Global Tariffs

Trump has dubbed April 2 “Liberation Day,” when he will unveil reciprocal tariffs to level the trading field between the United States and its 200 partners.

Voters Head to Polls in 3 Key Elections in Florida, Wisconsin: What to Watch For

On April 1, voters head to the polls for three races in Florida and Wisconsin, with substantial implications for the future beyond the current contests.

DNC, Schumer Sue Trump Over Order Targeting Illegal Immigrant Voting

DNC and two top U.S. lawmakers sued President Trump over a recent EO that aims to enforce the law against illegal immigrant voting and election dates.

Court Halts Trump Admin’s Move to Revoke Protected Status of Venezuelans

Federal judge in CA put a pause on the Trump admin’s plan to terminate TPS of 350,000 Venezuelan immigrants, whose legal status was set to expire on April 7.
spot_img

Related Articles

Popular Categories

MAGA Business Central