Financial and Fiscal Instruments for Catastrophe Risk Management : Addressing Losses from Flood Hazards in Central Europe

This report addresses the large flood exposures of Central Europe and proposes efficient financial and risk transfer mechanisms to mitigate fiscal losses from natural catastrophes. In particular, the Visegrad countries (V-4) of Central Europe, name...

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Bibliographic Details
Main Author:	Pollner, John
Format:	Publication
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	ACCESS TO CAPITAL ACCESS TO LOANS ALTERNATIVE FUNDING AMORTIZATION AMOUNT OF RISK ASSET PORTFOLIO ASSET VALUES BASIS RISK BENEFICIARY BOND FINANCING BOND FUND BOND INSTRUMENT BOND INSURANCE BOND INVESTOR BOND ISSUER BOND RATING BOND RETURN BOND SPREAD BOND SPREADS BOND YIELD BONDHOLDER BONDHOLDERS BROKER CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CASH FLOW CATASTROPHE BOND CATASTROPHE BONDS CATASTROPHE COVERAGE CATASTROPHE INSURANCE CATASTROPHE REINSURANCE CATASTROPHES CATASTROPHIC EVENT CATASTROPHIC EVENTS CATASTROPHIC LOSS CATASTROPHIC LOSSES CATASTROPHIC RISKS CENTRAL BANK CENTRAL GOVERNMENTS CLIMATE CLIMATE CHANGE COMMERCIAL BANKS CONTINGENT DEBT CONTRACT DESIGN COUNTRY RISK COUNTRY RISKS COUPON COUPON INTEREST RATE COVERAGE CRED CREDIT GUARANTEES CREDIT QUALITY CREDIT RISK CREDITORS CROP LOSSES CURRENCY DAMAGE ASSESSMENTS DEBT DEBT FINANCING DEBT INSTRUMENTS DEBT LEVELS DEBT SECURITY DEFAULT RISK DISASTER EVENT DISASTER EVENTS DISASTER FINANCING DISASTER MANAGEMENT DISASTER RECONSTRUCTION DISASTER RESPONSE DISASTER RISK DROUGHTS EARTHQUAKE EARTHQUAKES EPIDEMIOLOGY EUROPEAN CENTRAL BANK EXCHANGE RATES EXPENDITURE EXPENDITURES EXPLOSION EXTREME TEMPERATURES FEASIBILITY FINANCE MINISTRIES FINANCIAL COMPENSATION FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTRUMENT FINANCIAL INSTRUMENTS FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL MECHANISMS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL STRUCTURE FINANCING SOURCES FIRE FISCAL DEFICITS FLOOD FLOOD DAMAGES FLOOD INSURANCE FLOODING FLOODS GOVERNMENT ASSETS GOVERNMENT BUDGET GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GOVERNMENT SUPPORT GRACE PERIOD GROSS DOMESTIC PRODUCT GUARANTEE FEE HEAVY RAIN HOUSING HURRICANE HURRICANES IMPACT OF DISASTERS INCOME INCOME LEVEL INCOME LEVELS INDEBTEDNESS INDEMNITY INDEMNITY INSURANCE INFORMATION SYSTEM INFORMATION SYSTEMS INFORMED DECISIONS INSTRUMENT INSURANCE INSURANCE CONTRACT INSURANCE COVERAGE INSURANCE INDUSTRY INSURANCE INSTRUMENTS INSURANCE MARKET INSURANCE MARKETS INSURANCE MECHANISMS INSURANCE PAYOUT INSURANCE PENETRATION INSURANCE POLICIES INSURANCE PREMIUM INSURANCE PREMIUMS INSURANCE RESERVES INSURANCE RISK INSURANCE SECTOR INSURED LOSSES INSURER INSURERS INTEREST RATE INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS INVENTORY INVESTING ISSUANCE LANDSLIDES LEGAL PROVISIONS LEVEL OF RISK LIQUIDITY LOAN LOAN BALANCE MARKET COMPETITION MARKET INFORMATION MARKET INSTRUMENT MARKET INSTRUMENTS MARKET PRICING MATURITIES MATURITY MATURITY PERIOD MINISTRIES OF FINANCE NATURAL CATASTROPHES NATURAL DISASTER NATURAL DISASTERS OUTPUT DECLINES PORTFOLIO PORTFOLIO DIVERSIFICATION PORTFOLIOS PREMIUM PAYMENT PREMIUM PAYMENTS PRINCIPAL REPAYMENT PRIVATE COMMERCIAL BANKS PRIVATE INSURANCE PRIVATE PARTY PRIVATE PROPERTY PROBABILITY OF DEFAULT PUBLIC BUDGETS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC SECTOR DEFICITS PURCHASING POWER RATE OF RETURN REINSURANCE REINSURANCE BROKER REINSURANCE CONTRACTS REINSURERS REPAYMENTS RESERVE RESERVE FUNDS RESERVES RETURN RETURNS RISK ANALYSIS RISK ASSESSMENT RISK EXPOSURE RISK EXPOSURES RISK FACTORS RISK INSURANCE RISK MANAGEMENT RISK MANAGEMENT TOOLS RISK MANAGERS RISK POOLING RISK PREMIUM RISK TRANSFER SAVINGS SCENARIOS SECURITIES SHORT-TERM LIQUIDITY SOVEREIGN ENTITIES STATISTICAL ANALYSIS STORM STORMS SUBSIDIARIES SUSTAINABILITY SWAP SWAPS TRANSACTION TROPICAL CYCLONE TYPE OF DISASTER UNDERWRITING WEATHER DERIVATIVES WEATHER EVENTS WIND STORMS
Online Access:	http://documents.worldbank.org/curated/en/2012/07/16489253/financial-fiscal-instruments-catastrophe-risk-management-addressing-losses-flood-hazards-central-europe http://hdl.handle.net/10986/9381

Description
Summary:	This report addresses the large flood exposures of Central Europe and proposes efficient financial and risk transfer mechanisms to mitigate fiscal losses from natural catastrophes. In particular, the Visegrad countries (V-4) of Central Europe, namely, Poland, the Czech Republic, Hungary, and the Slovak Republic, have such tremendous potential flood damages that reliance on budgetary appropriations or even European Union (EU) funds in such circumstances becomes ineffective and does not provide needed cash funds for the quick response and recovery needed to minimize economic disruptions. The report is primarily addressed to the governments of the region, which should build into their fiscal planning the necessary contingent funding mechanisms, based on their exposures. The report is addressed to finance ministries and also to the insurance and securities regulators and the private insurance and capital markets, which may all play a role in the proposed mechanisms. An arrangement using a multi-country pool with a hazard-triggered insurance payout mechanism complemented by contingent financing is proposed, to better manage these risks and avoid major fiscal volatility and disruption.

Financial and Fiscal Instruments for Catastrophe Risk Management : Addressing Losses from Flood Hazards in Central Europe

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