As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Geneva Graduate Institute is pleased to invite you to a public talk given by Caterina Rho.

She will present her work titled Flooded Credit Markets: Loans to SMEs After a Natural Disaster

Abstract: Using a large dataset of securitized loans, we analyse the impact of floods on credit conditions for European small and medium enterprises. First, we document that firms in flooded counties face higher interest rates on new loans in the aftermath of the disaster, arguably as a result of higher credit demand for reconstruction purposes. Then, we uncover a credit supply effect whereby firms exposed to a flood are more likely to default on their loans than firms located in non-flooded areas. The effect is sizable, and persistent for up to two years after the hazard. This direct effect of flood events compounds the indirect effect of a higher interest rate as an important determinant of loan default.

About the speaker

Caterina Rho is an economist at the DG Financial Stability of Banco de México.​ She holds a Ph.D. in International Economics from the Graduate institute, Geneva.
Her research interests cover International Economics, Macroprudential Policy and Financial Markets. In particular, her work focuses on sovereign risk of default, banking risk of default and financial risk.