Natural Disasters and Bank Liquidity Creation in Sub-Saharan African Countries: Evidence from Banks Panel Dat

WORKING PAPER SERIES N° 01/2024

28 Pages Posted: 26 Jun 2024

See all articles by Joseph Attila

Joseph Attila

Univ. Artois, Univ. UPJV, UR 4286, Laboratoire LEFMI, Amiens, France

Jean-Louis Combes

University Clermont Auvergne

Rasmané Ouedraogo

International Monetary Fund (IMF)

Date Written: May 01, 2024

Abstract

This paper investigates the effects of natural disasters on bank liquidity creation in sub-Saharan African during the period 1988-2018. Using bank-level data from more than 30 countries, we find that natural disasters affect negatively the liquidity creation in the region. This impact is mainly channeled through the asset-side activities of banks. We also find heterogeneous impact of natural disasters on bank liquidity creation based on the size of banks, the magnitude of disasters and the income level of countries. Moreover, these effects are mainly observed when disasters strike on a large-scale. On the contrary, there is no significant difference depending on whether or not the disaster is climatic in origin. These results support policies aimed at strengthening the resilience of African financial systems in a context where losses related to natural disasters are likely to increase in the coming years.

Keywords: Natural disasters, bank liquidity, Africa Classification JEL G21, O16, O55

Suggested Citation

Attila, Joseph Gbewopo and Combes, Jean-Louis and Ouedraogo, Rasmané,
Natural Disasters and Bank Liquidity Creation in Sub-Saharan African Countries: Evidence from Banks Panel Dat (May 01, 2024). WORKING PAPER SERIES N° 01/2024
, Available at SSRN: https://ssrn.com/abstract=4870416 or http://dx.doi.org/10.2139/ssrn.4870416

Joseph Gbewopo Attila (Contact Author)

Univ. Artois, Univ. UPJV, UR 4286, Laboratoire LEFMI, Amiens, France ( email )

France

Jean-Louis Combes

University Clermont Auvergne ( email )

Rasmané Ouedraogo

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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