Journal of Financial Stability Vol. 60 2022
Community bank liquidity: Natural disasters as a natural experiment
open access
Abstract
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particular, we find that they respond to the liquidity needs of their communities by increasing loans as deposits are withdrawn.
- DOI
- 10.1016/j.jfs.2022.101002
- Volume
- 60
- Pages
- 101002
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref