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This paper investigates the impact of hurricanes on the banking sector in the British West Indies during the period between 1923 and 1927. The study utilizes a unique dataset comprising half-monthly banking data from 26 branches of the Colonial Bank in the Caribbean in conjunction with a measure of potential destruction caused by hurricanes. The event study methodology is employed to reveal the effects of hurricanes on the banking sector. The findings suggest that hurricanes significantly affect the demand for banking services in the affected areas. Specifically, clients accessed their savings and current accounts and overdrew their current accounts to finance the damages caused by the natural disaster, resulting in a substantial increase in the amount of withdrawals from savings and current accounts. In addition, there was a reduction in Drafts Payable, indicating a decrease in the amount of money transferred elsewhere. This suggests that clients from affected branches needed their funds and did not have additional funds to transfer either to other branches of the Colonial Bank or elsewhere. Furthermore, the study found that within the first two months after the hurricane strikes, there was a significant increase in the demand for loans by clients. This highlights their immediate need for additional funds to finance the repairs and reconstruction. Overall, this paper sheds light on the impact of hurricanes on the banking sector in the British West Indies during the 1920s, and adds to the existing literature on the effects of natural disasters on the banking sector, particularly in terms of efficient mobilization of resources for reconstruction efforts.
Presenter(s)
Joel Huesler, University of Bern
Impact of Tropical Storms on the Banking Sector in the British Colonial Caribbean
Category
Organized Session Abstract Submission
Description
Session: [006] FINANCIAL HISTORY (EHA/CLIO)
Date: 7/1/2023
Time: 8:15 AM to 10:00 AM
Date: 7/1/2023
Time: 8:15 AM to 10:00 AM