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The Impact of Natural Disasters on the Performance and Solvency of U.S. Banks


The Impact of Natural Disasters on the Performance and Solvency of U.S. Banks

Xu, Yixin (2020) The Impact of Natural Disasters on the Performance and Solvency of U.S. Banks. Masters thesis, Concordia University.

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This paper explores the effect of natural disasters on the profitability and solvency of U.S. banks. Employing a sample of 187 large-scale natural disasters that occurred in the U.S. between 2000 and 2014 and a sample of 2,891 banks, we find that natural disasters have a pronounced effect on the net-income-to-assets and the net-income-to-equity ratio of banks, as well as impaired loans and the return on average assets. We also observe significant effects on the equity ratio and the tier-1 capital ratio (two solvency measures). Interestingly, the latter are positive for regional banks which appear to voluntarily increase their capital reserves in response to natural disasters that affect part of their operations, but significantly negative for banks that operate locally or nationally.

Divisions:Concordia University > John Molson School of Business > Finance
Item Type:Thesis (Masters)
Authors:Xu, Yixin
Institution:Concordia University
Degree Name:M. Sc.
Date:4 August 2020
Thesis Supervisor(s):Walker, Thomas
Keywords:Natural Disasters, Banks, Bank Solvency, Bank Profitability
ID Code:987202
Deposited By: Yixin Xu
Deposited On:25 Nov 2020 16:44
Last Modified:25 Nov 2020 16:44


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