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Weblog Sequence on the Financial and Monetary Impacts of Excessive Climate Occasions within the Fed’s Second District


Nov 8, 2023


The frequency and ferocity of utmost climate occasions, corresponding to flooding, storms, and lethal warmth waves, have been on the rise lately. These local weather occasions, together with human adaption to deal with them, might have giant results on the financial system and monetary markets. It’s subsequently paramount to supply analysis concerning the financial system’s vulnerability to local weather occasions for policymakers, households, monetary establishments, and different gamers on this planet financial system to make knowledgeable choices. Within the coming days, we’re going to current a collection of 9 posts that try and take a step on this course whereas specializing in the Federal Reserve System’s Second District (NY, northern NJ, southwest CT, Puerto Rico, and the U.S. Virgin Islands). The twelve Federal Reserve Districts are depicted on this map.

Bodily and Transition Dangers

The primary two posts present a topographical view of the Second District’s publicity to 2 forms of local weather danger: bodily and transition. Bodily dangers are created by excessive climate occasions corresponding to storms, floods, and wildfires. Transition dangers come up because the financial system strikes from its reliance on carbon-based vitality towards utilizing zero carbon on a internet foundation. These dangers might come up as a consequence of quite a few elements corresponding to modifications in households’ preferences, agency improvements, or authorities coverage.

1. Evaluating Bodily Threat: The Fed’s Second District vs. the Nation (November 8)

2. Transition Dangers within the Fed’s Second District and the Nation (November 9)

Flood Dangers: New Knowledge and Implications

The subsequent set of posts within the collection zooms in on probably the most related bodily dangers for the Second District: floods. Within the preliminary publish, the authors focus on the prevalence of inaccuracies in flood maps within the District. Flood maps are necessary as a result of they determine 100-year flood danger areas—the Particular Flood Hazard Areas (SFHAs)—that are areas which have an opportunity of flooding “at the very least” as soon as in 100 years and the place flood insurance coverage is necessary. Within the following publish, the authors study how banks lend in “inaccurately mapped” areas. Within the last publish of this a part of the collection, the authors focus on whether or not companies within the Second District take into account flood danger when deciding the place they conduct enterprise, produce items, or render companies.

3. Flood Map Inaccuracies within the Fed’s Second District (November 10)

4. How Do Banks Lend in Inaccurate Flood Zones within the Fed’s Second District? (November 13)

5. Flood Threat and Agency Location Choices within the Fed’s Second District (November 14)

Impression of Excessive Climate Occasions on Small Enterprise Homeowners

The subsequent two posts within the collection proceed the examination of how companies reply to local weather dangers through the use of a number of information units to review how small enterprise homeowners are affected by completely different excessive climate occasions within the Second District.

6. How Do Pure Disasters Have an effect on Small Enterprise Homeowners within the Fed’s Second District? (November 15)

7. Small Enterprise Restoration after Pure Disasters within the Fed’s Second District (November 16)

The Impression of Hurricanes

The final two posts present case research of the affect of hurricanes within the Second District. The primary publish examines how basement condominium renters are uncovered to flood danger in New York Metropolis. The ultimate publish of the collection offers a case research on the affect of hurricanes on banks headquartered in Puerto Rico.

8. Flood-Inclined Basement Housing in New York Metropolis and the Impression to Low- and-Reasonable Revenue Renters (November 17)

9. Banks versus Hurricanes (November 20)

Concluding Remarks

Because the weblog posts of this collection will present, excessive climate occasions can have far reaching results on households, enterprise homeowners and monetary intermediaries within the Second District. The analysis on these phenomena is in its infancy, and so additional information assortment and analytical work are wanted to tell policymakers and the general public on the potential financial and monetary ramifications of future local weather occasions.

Photo: portrait of Julian Di Giovanni

Julian di Giovanni is the pinnacle of Local weather Threat Research within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.  

The best way to cite this publish:
Julian di Giovanni, “Weblog Sequence on the Financial and Monetary Impacts of Excessive Climate Occasions within the Fed’s Second District,” Federal Reserve Financial institution of New York Liberty Road Economics, November 8, 2023, https://libertystreeteconomics.newyorkfed.org/2023/11/blog-series-on-the-economic-and-financial-impacts-of-extreme-weather-events-in-the-feds-second-district/.

The views expressed on this publish are these of the writer(s) and don’t essentially replicate the place of the Federal Reserve Financial institution of New York or the Federal Reserve System. Any errors or omissions are the duty of the writer(s).


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