The Federal Reserve Board published a research paper that develops a granular, county-level view of large US banks’ commercial and industrial (C&I) loan exposures and applies the approach to assessing climate-related physical risks. The study focuses on how shifts in the geography of economic activity could translate into financial stability implications through banks’ spatially concentrated lending exposures. The paper constructs a new dataset by augmenting FR Y-14Q regulatory data with borrower microdata to locate exposures based on firms’ facility locations rather than only borrower headquarters. Using this mapping, the authors find that banks have exposures in almost all US counties, with lending clustered in particular geographies, and show how the same framework can identify counties where banks’ C&I exposures are high and physical risks have historically generated large losses.
Federal Reserve Board 2025-01-31
Federal Reserve Board publishes research mapping large US banks’ C&I loan exposures with an application to physical climate risk
The Federal Reserve Board released a research paper analyzing large US banks' commercial and industrial loan exposures at the county level to assess climate-related physical risks. The study uses a new dataset combining FR Y-14Q regulatory data with borrower microdata to map exposures based on facility locations. Findings reveal banks' lending is geographically concentrated, highlighting areas with high exposures and significant historical physical risk.