TY - JOUR
T1 - Community Bank Liquidity: Natural Disasters as a Natural Experiment
T2 - Natural disasters as a natural experiment
AU - Winters, Drew
AU - Allen, Kyle
AU - Whitledge, Matthew D
N1 - Funding Information:
We appreciate the helpful comments and suggestions of the anonymous reviewers. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/6
Y1 - 2022/6
N2 - We examine how community banks respond to liquidity shocks created by natural disasters. We address community banks’ responses to liquidity shocks due to their focused geographic and economic presence, which coincide with their communities’ exposure to the disasters and the ability of the local banks to meet their needs. We find that community banks respond to liquidity shocks by managing their balance sheet, rather than any single balance sheet account. In particular, we find that they respond to the liquidity needs of their communities by increasing loans as deposits are withdrawn.
AB - We examine how community banks respond to liquidity shocks created by natural disasters. We address community banks’ responses to liquidity shocks due to their focused geographic and economic presence, which coincide with their communities’ exposure to the disasters and the ability of the local banks to meet their needs. We find that community banks respond to liquidity shocks by managing their balance sheet, rather than any single balance sheet account. In particular, we find that they respond to the liquidity needs of their communities by increasing loans as deposits are withdrawn.
KW - Community bank
KW - Liquidity
KW - Natural disaster
UR - http://www.scopus.com/inward/record.url?scp=85127763233&partnerID=8YFLogxK
U2 - 10.1016/j.jfs.2022.101002
DO - 10.1016/j.jfs.2022.101002
M3 - Article
SN - 1572-3089
VL - 60
JO - Journal of Financial Stability
JF - Journal of Financial Stability
M1 - 101002
ER -