Local Banks and flood risk: the case of Germany
This paper uses a simulation model to evaluate the effects of river flooding events occurring within Germany on regional’ banks. Under a 1.5℃ increase in temperature, the impact is overall rather small, even accounting for the devaluation of loans exposed to floods. Specifically, climate related risks would increase bank losses by 0.1% with large variability across NUTS2 regions. However, under a 3℃ increase, bank losses increases up to 1% of total assets. We show that the implementation of adaptation solutions would be successful in keeping risks at the current level. By supporting adaptation initiatives, such as investing in climate-resilient infrastructure or providing financial services to support sustainable practices, banks can play a crucial role in building the resilience of the financial sector and reducing the overall impact on the economy.
BELLIA Mario;
DI GIROLAMO Francesca;
PAGANO Andrea;
2025-05-27
ACADEMIC PRESS LTD- ELSEVIER SCIENCE LTD
JRC140161
1095-8630 (online),
https://www.sciencedirect.com/science/article/pii/S0301479724033905?via%3Dihub,
https://www.sciencedirect.com/science/article/pii/S0301479724033905,
https://publications.jrc.ec.europa.eu/repository/handle/JRC140161,
10.1016/j.jenvman.2024.123404 (online),
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