---
title: Natural Disasters, Adaptation and Default Risk
url: https://www.ml-quant.com/papers/repec/idb-brikps-14759/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-11-06
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: RePEc:idb:brikps:14759
source_url: https://econpapers.repec.org/RePEc:idb:brikps:14759
featured: 2026-11-06
citations: unknown
topic: Risk, Credit & Banking
---


# Natural Disasters, Adaptation and Default Risk

A sovereign default model shows that high borrowing costs and debt overhang depress public adaptation spending, yet adaptation yields the largest welfare gains when financing is tightest near default.

- Source: https://econpapers.repec.org/RePEc:idb:brikps:14759
- Identifier: RePEc:idb:brikps:14759
- Released: 2026-10-30
- First featured: Quant Letter No. 138 (2026-11-06): https://www.ml-quant.com/issues/2026-11-06/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Risk, Credit & Banking
- Authors: Bolivar, Carlos, Dueñas, Federico, Valencia, Oscar

## Related

- [Attention-based Dynamic Multilayer Graph Neural Networks for Loan Default Prediction](https://www.ml-quant.com/papers/arxiv/2402.00299/): A dynamic multilayer network model has been created for improved credit risk assessment, considering borrower connections and their evolution over time.
- [Financial Fragilities and Risk-taking of Corporate Bond Funds in the Aftermath of Central Bank Policy Interventions](https://www.ml-quant.com/papers/ssrn/4463970/): It finds that central bank asset purchases during the pandemic led corporate bond fund managers to take more risks, affecting market stability.
- [The Determinants of Net Interest Margin in the Turkish Banking Sector: Does Bank Ownership Matter?](https://www.ml-quant.com/papers/arxiv/2506.04384/): A study on the Turkish banking sector identifies operation diversity, credit risk, and operating costs as key factors influencing net interest margin, with impacts varying across different bank types.
- [Recalibrating binary probabilistic classifiers](https://www.ml-quant.com/papers/arxiv/2505.19068/): The article discusses recalibrating binary probabilistic classifiers from a distribution shift perspective, introducing two new methods for conservative results in credit risk assessments.
- [Modelling the term-structure of default risk under IFRS 9 within a multistate regression framework](https://www.ml-quant.com/papers/arxiv/2502.14479/): A study comparing three loan behavior modeling techniques finds multinomial logistic regression to be the most effective, potentially improving loss reserve estimates in banking.
- [The Relative Entropy of Expectation and Price](https://www.ml-quant.com/papers/arxiv/2502.08613/): The article explores the non-linear pricing in incomplete securities markets, measuring strategic risks using an entropic risk metric and adjusting the price for market incompleteness and default risk.