How Effective were the Financial Safety Nets in the Aftermath of Katrina?
Julia S. Cheney
Federal Reserve Bank of Philadelphia
Sherrie L.W. Rhine
Federal Reserve Bank of New York
FRB of Philadelphia Payment Cards Center Discussion Paper No. 06-01
This paper describes the U.S. financial system's response to the destruction caused by Hurricane Katrina and examines how financial safety nets helped meet consumers' needs in the aftermath of the storm. Overall, we find that consumers who hold deposit accounts at financial institutions are less vulnerable to financial disruptions than individuals who do not have either a checking or a savings account (the unbanked). The federal banking regulators' and financial institutions' responses to Hurricane Katrina, the financial vulnerability of unbanked families to this unexpected catastrophic event, and how the American Red Cross, FEMA, and the Gulf States' relief efforts supplied financial assistance to Katrina's victims are also addressed. Finally, we present several strategies that can be pursued to further safeguard the U.S. population and the financial community against extraordinary events.
Number of Pages in PDF File: 21
Keywords: Hurricane Katrina, Financial crises, Unbankedworking papers series
Date posted: March 3, 2006
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