Resilience of the Financial System to Natural Disasters

Patrick Bolton, Marcin Kacperczyk, Harrison Hong, Xavier Vives 25 May 2021



The Covid-19 pandemic has exposed severe vulnerabilities in the global financial system, and serves as a cautionary tale for the potentially devastating effects that future natural disasters and climate change could cause to the world economy. The question of whether society is adequately prepared and what measures can be put in place to mitigate these risks has never been more pertinent.

This CEPR/IESE report, the third report in the series on The Future of Banking, part of the Banking Initiative from the IESE Business School and supported by Citi, tests precisely how resilient the financial system is to natural disasters and discusses what can be done to make it more resilient. The report details how to reshape central bank policies to address climate-related risks, debates the role of asset managers in dealing with natural disasters and climate risk, and explains why mitigation is a form of self-insurance to limit the systemic risks of global warming.

Download the report here.

Barbara and David Zalaznick Professor of Business, Columbia University

Professor of Finance, Imperial College London Business School

John R. Eckel Jr. Professor of Economics, Columbia University

Professor of Economics and Finance and Academic Director of the Public-Private Sector Research Center at IESE Business School; CEPR Research Fellow


CEPR Policy Research