{
  "title": "Beyond the Dikes: Flood Scenarios for Financial Stability Risk Analysis",
  "publication": "IMF Working Papers, September 13, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2024/09/13/beyond-the-dikes-flood-scenarios-for-financial-stability-risk-analysis-554830",
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  "summary": "We assess financial stability risks from floods in the Netherlands using a comprehensive set of flood scenarios considering different factors including geographical regions, flood types, climate conditions, return periods, and adaptation.",
  "sections": [
    {
      "heading": "Study scope and methodology",
      "content": "- Assesses financial stability risks from floods in the Netherlands using a comprehensive set of flood scenarios.\n- Flood scenarios vary by: geographical regions, flood types, climate conditions, return periods, and adaptation.\n- Estimated damage from each flood scenario is used to calibrate the corresponding macro-financial scenario for bank stress tests."
    },
    {
      "heading": "Key findings",
      "content": "- The impact of floods on bank capital varies significantly by scenario, demonstrating the importance of considering heterogeneous factors in physical climate risk stress tests.\n- Climate change amplifies the adverse impact on banks’ capital.\n- Stronger flood defenses in the Netherlands can help mitigate some impacts.\n- There is a non-linear relationship between flood damages and banks’ capital depletion, highlighting the importance of considering extreme scenarios."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Climate change, Commercial banks, Environment, Financial institutions, Financial sector policy and analysis, Housing prices, Natural disasters, Prices, Stress testing\n- Keywords: bank capital, banking stress test, Climate change, climate risk analysis, climate risk stress tests, Commercial banks, flood scenario, Global, Housing prices, Natural disasters, Physical risk, Stress testing\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2024/09/13/beyond-the-dikes-flood-scenarios-for-financial-stability-risk-analysis-554830"
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    "Authors: Caterina Lepore, Junghwan Mok",
    "Published: September 13, 2024",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400289545.001",
    "Assesses financial stability risks from floods in the Netherlands using a comprehensive set of flood scenarios.",
    "Flood scenarios vary by: geographical regions, flood types, climate conditions, return periods, and adaptation.",
    "Estimated damage from each flood scenario is used to calibrate the corresponding macro-financial scenario for bank stress tests.",
    "The impact of floods on bank capital varies significantly by scenario, demonstrating the importance of considering heterogeneous factors in physical climate risk stress tests.",
    "Climate change amplifies the adverse impact on banks’ capital.",
    "Stronger flood defenses in the Netherlands can help mitigate some impacts.",
    "There is a non-linear relationship between flood damages and banks’ capital depletion, highlighting the importance of considering extreme scenarios.",
    "Subject: Climate change, Commercial banks, Environment, Financial institutions, Financial sector policy and analysis, Housing prices, Natural disasters, Prices, Stress testing",
    "Keywords: bank capital, banking stress test, Climate change, climate risk analysis, climate risk stress tests, Commercial banks, flood scenario, Global, Housing prices, Natural disasters, Physical risk, Stress testing",
    "**Working Paper**"
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