본문 내용으로 건더뛰기

KDI 경제정보센터

ENG
  • 경제배움
  • Economic

    Information

    and Education

    Center

최신자료
Insurance, Weather, and Financial Stability
FRB of New York
2024.06.03
In this paper, we introduce a model to study the interaction between insurance and banking. We build on the Federal Crop Insurance Act of 1980, which significantly expanded and restructured the decades-old federal crop insurance program and adverse weather shocks ? over-exposure of crops to heat and acute weather events ? to investigate some insights from our model. Banks increased lending to the agricultural sector in counties with higher insurance coverage after 1980, even when affected by adverse weather shocks. Further, while they increased risky lending, they were sufficiently compensated by insurance such that their overall risk did not increase meaningfully. We discuss the implications of our results in the light of potential changes to insurance availability as a consequence of global warming.