IDEAS home Printed from https://ideas.repec.org/p/bdi/opques/qef_925_25.html
   My bibliography  Save this paper

Here comes the flood: the climate risk of residential mortgages in Rimini

Author

Listed:
  • Ivan Faiella

    (Bank of Italy)

  • Luciano Lavecchia

    (Bank of Italy)

Abstract

This paper seeks to assess the expected reduction of the residual debt for the purchase of properties included in the mortgage portfolio of some banking intermediaries operating in an area particularly exposed to the risk of coastal flooding (Rimini) by evaluating different scenarios, including the implementation of an adaptation intervention (the Parco del Mare). For these analyses, we cross-referenced the data on bank assets from a sample of banks with the data on expected damages (distinguished by scenario and return periods) elaborated by researchers at the Centro Euro-Mediterraneo sui Cambiamenti Climatici Foundation (CMCC). The estimated losses, in relation to the value of the properties by census section, were applied to the mortgage portfolio of the banks participating in the project. The results show that the coastal barrier significantly reduces the losses in the mortgage portfolio, highlighting a significant heterogeneity of the impact among the intermediaries involved. It is also emerges that the banking system needs to improve the quality of the information required to identify the assets exposed to such risk and to assess their vulnerability should the event materialize.

Suggested Citation

  • Ivan Faiella & Luciano Lavecchia, 2025. "Here comes the flood: the climate risk of residential mortgages in Rimini," Questioni di Economia e Finanza (Occasional Papers) 925, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_925_25
    as

    Download full text from publisher

    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2025-0925/QEF_925_25.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dylan E. McNamara & Martin D. Smith & Zachary Williams & Sathya Gopalakrishnan & Craig E. Landry, 2024. "Policy and market forces delay real estate price declines on the US coast," Nature Communications, Nature, vol. 15(1), pages 1-16, December.
    2. Giorgio Meucci & Francesca Rinaldi, 2022. "Bank exposure to climate-related physical risk In Italy: an assessment based on AnaCredit data on loans to non-financial corporations," Questioni di Economia e Finanza (Occasional Papers) 706, Bank of Italy, Economic Research and International Relations Area.
    3. Ivan Faiella & Filippo Natoli, 2018. "Natural catastrophes and bank lending: the case of flood risk in Italy," Questioni di Economia e Finanza (Occasional Papers) 457, Bank of Italy, Economic Research and International Relations Area.
    4. Giacomo Bressan & Anja Đuranović & Irene Monasterolo & Stefano Battiston, 2024. "Asset-level assessment of climate physical risk matters for adaptation finance," Nature Communications, Nature, vol. 15(1), pages 1-13, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michele Loberto & Riccardo Russo, 2024. "The exposure of Italian manufacturing firms to hydrogeological risk," Questioni di Economia e Finanza (Occasional Papers) 899, Bank of Italy, Economic Research and International Relations Area.
    2. Matteo Alessi & Ilaria Manti & Luca Santabarbara, 2024. "Natural Disasters, Local banking, and Recovery lending: evidence from an Italian earthquake," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 14(6), pages 1-2.
    3. Michele Loberto & Matteo Spuri, 2023. "The impact of flood risk on real estate wealth in Italy," Questioni di Economia e Finanza (Occasional Papers) 768, Bank of Italy, Economic Research and International Relations Area.
    4. Avril, Pauline & Levieuge, Grégory & Turcu, Camelia, 2025. "Natural disasters and financial stress: can macroprudential regulation tame green swans?," Journal of International Money and Finance, Elsevier, vol. 154(C).
    5. Shala, Iliriana & Schumacher, Benno, 2022. "The impact of natural disasters on banks' impairment flow: Evidence from Germany," Discussion Papers 36/2022, Deutsche Bundesbank.
    6. Justin Contat & Carrie Hopkins & Luis Mejia & Matthew Suandi, 2024. "When climate meets real estate: A survey of the literature," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(3), pages 618-659, May.
    7. Calice,Pietro & Miguel Liriano,Faruk, 2021. "Climate-Related and Environmental Risks for the Banking Sector in Latin America and the Caribbean : A Preliminary Assessment," Policy Research Working Paper Series 9694, The World Bank.
    8. Billio, Monica & Butticè, Vincenzo & Pietro, Francesca Di & Tenca, Francesca & Vismara, Silvio, 2025. "Rising tides, rising funds: Floods and climate mitigation campaigns in equity crowdfunding," Finance Research Letters, Elsevier, vol. 74(C).
    9. Ivan Faiella & Luciano Lavecchia, 2020. "The carbon footprint of Italian loans," Questioni di Economia e Finanza (Occasional Papers) 557, Bank of Italy, Economic Research and International Relations Area.
    10. Luigi Abate & Valeria Lionetti & Valentina Michelangeli, 2024. "Is the Italian green mortgage market ready to take off?," Questioni di Economia e Finanza (Occasional Papers) 868, Bank of Italy, Economic Research and International Relations Area.
    11. Drudi, Francesco & Moench, Emanuel & Holthausen, Cornelia & Weber, Pierre-François & Ferrucci, Gianluigi & Setzer, Ralph & Adao, Bernardino & Dées, Stéphane & Alogoskoufis, Spyros & Téllez, Mar Delgad, 2021. "Climate change and monetary policy in the euro area," Occasional Paper Series 271, European Central Bank.
    12. Alogoskoufis, Spyros & Dunz, Nepomuk & Emambakhsh, Tina & Hennig, Tristan & Kaijser, Michiel & Kouratzoglou, Charalampos & Muñoz, Manuel A. & Parisi, Laura & Salleo, Carmelo, 2021. "ECB’s economy-wide climate stress test," Occasional Paper Series 281, European Central Bank.
    13. Ivan Faiella & Danila Malvolti, 2020. "The climate risk for the finance in Italy," Questioni di Economia e Finanza (Occasional Papers) 545, Bank of Italy, Economic Research and International Relations Area.
    14. Wolfgang Pointner & Doris Ritzberger-Grünwald, 2019. "Climate change as a risk to financial stability," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 38, pages 30-45.
    15. Simona Cosma & Paola Schwizer & Lorenzo Nobile & Rossella Leopizzi, 2021. "Environmental attitude in the board. Who are the “green directors”? Evidences from Italy," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3360-3375, November.
    16. Poudel, Sandeep & Elliott, Rebecca & Anyah, Richard & Grabowski, Zbigniew & Knighton, James, 2024. "Differential flood insurance participation and housing market trajectories under future coastal flooding in the United States," LSE Research Online Documents on Economics 125933, London School of Economics and Political Science, LSE Library.
    17. Chalabi-Jabado, Fatima & Ziane, Ydriss, 2024. "Climate risks, financial performance and lending growth: Evidence from the banking industry," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    18. Huang, Shupei & Wang, Xinya & Xue, Yi & Zhang, Xinzhi, 2025. "CEOS’ climate risk perception bias and corporate debt structure," Journal of International Money and Finance, Elsevier, vol. 151(C).
    19. Pauline Avril & Gregory Levieuge & Camelia Turcu, 2023. "Do bankers want their umbrellas back when it rains? Evidence from typhoons in China," Working Papers 2023.08, International Network for Economic Research - INFER.
    20. Shouwei Li & Xin Wu, 2023. "How does climate risk affect bank loan supply? Empirical evidence from China," Economic Change and Restructuring, Springer, vol. 56(4), pages 2169-2204, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:opques:qef_925_25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.