Bank experts Steven Ongena and Anna Pestova discuss how banks handle disasters like wars, pandemics, and natural calamities. They explore the impact of armed conflicts on financial systems, the effects of sanctions on banks, and strategies to manage risks from pandemics and natural disasters. The podcast highlights the importance of banks in providing crucial credit during emergencies and the need to enhance regulatory frameworks for disaster preparedness.
Banks face challenges from wars and sanctions, affecting credit supply and lending behavior.
Geographical diversification and preparedness influence how banks respond to disasters, impacting income inequality.
Deep dives
Increasing Frequency of Disasters
Disasters, including wars, pandemics, and natural disasters, have been on the rise in recent years. An increase in wars and sanctions has been noted, along with the impact of pandemics like COVID-19. The link between natural disasters and climate change has led to a doubling in their frequency and impact over the last few decades.
Effects of Wars and Sanctions on Banks
Wars and sanctions have significant negative impacts on banks, leading to credit contractions, interest rate increases, and changes in lending behavior. Sanctions on Russian banks, for example, restrict their operations and affect their borrowers. The response of foreign banks to sanctions depends on their political alignment and origins.
Bank Responses to Disasters
Banks respond differently to disasters based on their preparedness and geographical diversification. During conflicts and natural disasters, banks play a crucial role in preserving income inequality and facilitating credit supply for rebuilding efforts. Regulators and supervisors may need to consider tightening regulations to enhance bank resilience in the face of increasing disaster frequency.
Whether they war, disease or natural disasters, banks need to prepare for, and cope with, unexpected events. The third LTI report is published on 18 March by CEPR. Steven Ongena and Anna Pestova explain to Tim Phillips what the report reveals about how banks respond to these three types of disasters – and what that means for their customers.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode